Key facts
- The UK economy grew by 0.6% in Q1 2026.
- The services sector was the largest contributor to UK economic growth in Q1 2026.
- UK annual shop price inflation was unchanged in June.
- Fresh food costs in the UK fell in June due to summer promotions.
- British business confidence in the economic outlook declined in June.
- Manufacturing sector confidence saw a notable drop in June.
- German unemployment fell by 1,000 in June.
- The German seasonally adjusted jobless rate was 6.3% in June.
- German retail sales rose by 1.1% month-over-month in May.
- German retail sales saw a 1.6% year-over-year gain in May.
The UK economy demonstrated a growth of 0.6% in the first quarter of 2026, aligning with preliminary estimates, as reported by the Office for National Statistics (ONS). The services sector was identified as the main contributor to this expansion. In a separate development, British annual shop price inflation remained flat in June, mirroring the rate observed in May. This stability is largely attributed to a slowdown in food price inflation. Specifically, fresh food costs experienced a decline, aided by summer promotions on items like strawberries and ice cream, even as energy prices continued to rise. Concurrently, British businesses expressed a decline in confidence regarding the overall economic outlook in June, according to a survey conducted by Lloyds. Despite this dip in general economic sentiment, businesses maintained optimism about their individual trading prospects. The manufacturing sector, however, experienced a notable decrease in confidence. Across the channel, Germany's labor market defied expectations in June. The country's unemployment figure fell by 1,000, contrary to predictions of a 7,000 increase. The seasonally adjusted jobless rate remained stable at 6.3%, with the total number of unemployed individuals standing at 2.984 million. In May, German retail sales also showed an unexpected upward trend, rising by 1.1% compared to the previous month, surpassing analysts' forecasts of no change. However, on a year-over-year basis, retail sales saw a 1.6% increase, which represents a moderation from April's revised 2.9% gain. Monthly retail sales figures also indicated an unexpected decline of 1.6% in May.