The boat moved from Kirkenes to Narvik in early May and set-off for her second patrol on 17 June 1942. She sank two American ships, part of the ill-fated Convoy PQ 17, on 5 July. After a three-hour pursuit, the Carlton was hit by a torpedo which did not detonate. A second torpedo exploded on impact, the ship sank in ten minutes. U-88 then hit the Daniel Morgan which had already been attacked by German aircraft. Three men died, there were 51 survivors.
