Revised data from the Office for National Statistics (ONS) indicates that UK household income grew more strongly than initially reported in the first half of 2026, reflecting ongoing economic resilience despite geopolitical tensions. Between January and June, income per capita increased by 1.1%, exceeding earlier estimates.
The ONS updated GDP growth for the second quarter to 0.5%, up from a previously reported 0.4%, confirming that the UK economy expanded at the same pace as the United States during the first six months of the year. This followed a 0.6% growth rate in the first quarter.
Analysts have attributed part of the positive momentum to increased confidence linked to political developments, noting a “Burnham bounce” following the announcement of the Makerfield by-election in May, which set the stage for former Manchester mayor Andy Burnham’s prospective rise to prime minister.
Household saving rates also edged upward, rising from 8.6% in the first quarter to 8.8% in the second, suggesting some of the income gains were set aside alongside increased spending. Business investment was notably robust, rising 1.8% in the April to June period and standing 5.2% higher than a year earlier.
Market observers pointed to several factors behind the upbeat data. Kathleen Brooks, research director at XTB, highlighted stronger growth in the services sector and rising household spending as key contributors. She also drew attention to unexpected strength in business investment and an improvement in export performance, backed by an uptick in trade figures.
The revised figures were welcomed by investors and policymakers alike, offering a positive signal ahead of Chancellor John Healey’s first budget scheduled for next month. Thomas Watts, a fund manager at Julius Baer, described the data as “yet more positive news for the new administration,” emphasizing the UK economy’s ability to withstand pressures related to the ongoing US-Israel conflict with Iran, energy price volatility, and higher borrowing costs.
Financial markets reacted favorably to the revisions. Sterling strengthened to a six-week high against the euro, reaching levels not seen since mid-August, and rose to a one-week peak against the US dollar, trading at $1.3292. The appreciation of the pound fueled speculation that the Bank of England might consider further interest rate increases to temper inflation, which remains at 3.1%, above the central bank’s 2% target.
Meanwhile, UK government bond yields showed a modest decline, with two-year yields falling 0.05 percentage points to 4.86%, and 10-year yields decreasing by four basis points to 5.356%. This movement was supported by the stronger economic data and a recent easing of global oil prices.
Oil markets have remained volatile throughout the year, with Brent crude prices briefly crossing the $100 per barrel mark amid ongoing conflict-related uncertainties despite a summer ceasefire. Recent easing in prices has done little to diminish broader concerns about supply stability in the region.