Recent UK GDP data showing 0.6% quarterly growth in Q1 2026 and 0.5% in Q2, supported by household consumption and services, has anchored trader expectations for full-year annual growth in the 1-2% range. Independent forecasts from the HM Treasury survey, Bank of England projections, and institutions such as Crédit Agricole and Barclays cluster tightly around 1.1-1.4%, reflecting the market-implied odds. Elevated energy prices stemming from Middle East developments, combined with restrictive Bank Rate at 3.75% and anticipated fiscal tightening, are expected to weigh on real incomes and investment in the second half, capping upside risks while limiting downside to modest contraction scenarios. Stronger productivity gains from AI investment or a sharper terms-of-trade shock could shift outcomes outside this band.