UK economy posts surprise growth in Q2 but outlook remains challenging

The UK economy grew 0.2% in Q2, exceeding forecasts, driven by warm weather boosting consumer sectors in June.
Growth was supported by manufacturing, services and household spending, but the UK economy still lags peers and is below pre-pandemic levels.
The Bank of England has raised interest rates to 5.25%, the highest since 2008, adding pressure on growth.
Economists expect ongoing challenges from high inflation, labor disputes and the impact of Brexit on trade.
Quarterly GDP growth is expected to remain modest near 0.2% in the near term before a potential mild recession later this year.