TD Securities strategists anticipate that the United Kingdom's June Gross Domestic Product (GDP) data will show a reversal of the strong performance seen in May's professional services sector, which will be offset by solid retail sales, resulting in a flat Index of Services for the month. They project modest weakness in industrial production, which is expected to keep monthly GDP growth at 0.0% month-on-month (m/m), compared to market expectations of -0.1% and a prior reading of 0.1% [1].
Despite the anticipated muted performance in June, TD Securities forecasts that Q2 GDP will register a firm 0.4% quarter-on-quarter (q/q) growth, in line with market consensus (0.4%) and slightly above the Bank of England's estimate (0.3%). This would mark a strong end to the first half of the year for the UK economy [1].
However, TD Securities cautions that this apparent strength in Q2 GDP may be artificial, suggesting that GDP growth could flatline in the second half of 2026. The strategists highlight that the robust Q2 figures may not be sustainable, pointing to potential stagnation in the coming quarters [1].
CONCLUSION
TD Securities sees UK Q2 GDP growth as firm but potentially misleading, warning that the momentum may not carry into the second half of 2026. Investors should be cautious, as the underlying data suggests possible stagnation ahead.