At a glance
- GDP grew 0.4% in July, fastest annual pace in 18 months, boosted by AI.
- Services led growth, led by IT/computer programming as AI activity rose.
- Headwinds from U.S.-Iran tensions limited impact; growth beat economists' forecasts.
July GDP Surprises
Britain’s economy grew at the fastest annual pace in 18 months in July, with gross domestic product 1.6% higher than a year earlier, according to Office for National Statistics figures released on Friday.
The ONS also showed the economy grew 0.4% on the month in July, while growth in the three months to July was also stronger than expected at 0.4%.
Where the coverage agrees
Eight outlets tell the same story. They stress AI-driven services growth offsetting Iran-war and energy-cost headwinds.
Liz McKeown, the ONS director of economic statistics, said much of the growth over the past three months appeared to come from businesses involved in computer programming benefiting from the AI boom.
The Reuters report said the figures offered a boost to new finance minister John Healey ahead of his first budget on October 28, even as soaring government borrowing costs and surging oil prices risk overshadowing the data.
AI, Iran War, Rate Hike
James Smith, a developed markets economist at ING, said, "The UK economy has performed much better than expected amid the fallout of the Iran war," while Liz McKeown added that services drove growth in July with computer programming making the largest contribution.
The Reuters report said the conflict this week pushed oil prices above $105 a barrel, with knock-on impacts on government borrowing costs at multi-decade highs, and the Bank of England expects inflation to rise to around 3.2% later this year.
Almost all economists polled by Reuters expected the Bank of England to keep interest rates on hold next week and for the rest of this year, but financial markets think it is near certain that rates will rise by November.
In a separate report, Sky News said rising energy costs are threatening a slowdown in the months ahead as the ONS figures suggest resilience to date, and it quoted Liz McKeown saying, "Within services, computer programming was the largest contributor".
Budget Stakes and Politics
The Guardian said the July expansion was driven by growth of 0.4% in the services sector, particularly admin services, and computer programming and consulting, with the ONS noting that many of the businesses reporting the largest turnover were involved in activities related to artificial intelligence and cloud computing.
The Guardian also quoted John Healey saying, "Britain’s economy is demonstrating a welcome resilience, despite serious global uncertainty," while warning that growth was "still fragile" and that the conflict in the Middle East has impacts at home from the cost of the weekly family shop to the cost of government borrowing.
Sanjay Raja, chief UK economist at Deutsche Bank, said, "The UK growth story is becoming harder to ignore," as households and businesses continued spending despite the unfolding energy shock.
The Reuters report framed the data as a boost to Healey ahead of his first budget on October 28, while noting that it may make some Bank of England officials more willing to consider a rate hike before the end of the year.
Explore the original reporting
Compare all 15 sources
How each outlet frames it
Every outlet we compared, the headline it ran, and a link to the original article.
Other
UK economy grows at fastest pace since February 2025 on possible AI boost
UK GDP Surprises with 0.4% Growth in July—A Welcome Boost for the Burnham Government
The British economy marks its biggest growth since early 2025, boosted by AI.
Western Mainstream
The British economy surprises in July with a growth of 0.4%
Asian
AI-Driven Boost Fuels UK's Fastest Economic Growth Surge
UK economy surprisingly grows in July on AI boost
Latin American
UK GDP accelerates its monthly growth in July by one tenth, to 0.4%
West Asian
The British economy defies expectations.. Surprising growth confuses Bailey and Helly’s calculations
Suddenly... the British economy grows by 0.4% in July
Read stored source text: 1450 AM 99.7 FM WHTC
By David Milliken LONDON, Sept 11 (Reuters) – Britain’s economy grew at the fastest annual pace in 18 months in July, helped by a boost from artificial intelligence and extending a strong first-half performance despite headwinds from the U.S.-Iran war, official figures showed on Friday. The figures offer a boost to new finance minister John Healey ahead of his first budget on October 28 – which risks being overshadowed by soaring government borrowing costs and surging oil prices – and may make some Bank of England officials more willing to consider a rate hike before the end of the year. British gross domestic product in July was 1.6% higher than a year earlier, the fastest annual growth since February 2025 and above economists’ 1.2% forecast, the Office for National Statistics showed on Friday. The economy grew 0.4% on the month in July, compared with median expectations in a Reuters poll for unchanged output, and growth in the three months to July – which smooths volatility – was also stronger than expected at 0.4%. “The UK economy has performed much better than expected amid the fallout of the Iran war,” said James Smith, developed markets economist at ING, noting that inflation had risen less steeply than first predicted. BUSINESSES BENEFITING FROM AI HELP LIFT GROWTH Much of the growth over the past three months appeared to come from businesses involved in computer programming that were benefiting from the AI boom, the ONS’ director of economic statistics, Liz McKeown, said. “Looking at the latest month, services also drove growth in July, with computer programming again making the largest contribution,” she added, noting an extra boost for some firms from the men’s soccer World Cup and unusually hot weather. Responding to the data, Healey said the economy was showing “welcome resilience” but that growth was “still fragile”. Sterling was little changed against the U.S. dollar after the data and economists had mixed views about whether Britain’s current economic outperformance would be sustained. In the first half of 2026, Britain’s economy expanded by 1%, the fastest growth across the Group of Seven large advanced economies, and some analysts believe this may in part reflect seasonal effects that have not been fully adjusted for. “We’re starting to reach the point in the year where we expect growth to peter out,” said Matt Swannell, chief economic adviser to forecasters ITEM Club. But others were more positive. “The UK growth story is becoming harder to ignore,” said Deutsche Bank Chief UK Economist Sanjay Raja. Forecasters were likely to revise up their expectations for full-year growth by 0.1 percentage points after the latest data, he added. Many economists think British productivity growth – a key driver of longer-term economic performance and living standards – is beginning to recover after a 20-year decline though it remains early days and there is no clear consensus on the cause. SHADOW OF IRAN WAR In July, the Bank of England predicted the economy would expand 1.1% over 2026 as a whole, and this week Governor Andrew Bailey told a parliament committee that economic data since then had come in “a bit stronger” than he had expected. Measures of consumer confidence and business activity also strengthened over the summer after Prime Minister Andy Burnham took over from his Labour predecessor Keir Starmer. Britain, like other European economies, has taken less of an immediate hit to growth from the U.S.-Israeli war on Iran than economists had feared at the outset. But the conflict this week pushed oil prices above $105 a barrel with knock-on impacts on government borrowing costs, which are now at multi-decade highs, and the BoE expects inflation to rise to around 3.2% later this year. Almost all economists polled by Reuters expect the BoE to keep interest rates on hold next week and for the rest of this year, but financial markets think it is near certain that rates will rise by November due to stronger inflation pressures. (Reporting by David Milliken and Andy Bruce; Editing by William James, Kate Mayberry and Alison Williams)
Read stored source text: BBC
- Published The UK's economy grew faster than expected in July partly helped by businesses using artificial intelligence (AI). The economy expanded by 0.4%, the Office for National Statistics (ONS) said, whereas economists had predicted no growth. The expansion was helped by a strong performance from the services sector, and particularly computer programming. Experts said July's growth figure showed the UK economy was proving resilient in the face of shocks such as the war in Iran, but said they expected growth to slow in the months ahead as high energy prices affect households. July's figure follows growth of 0.3% in June and zero growth in May. According to the ONS director of economic statistics, Liz McKeown, there was evidence that businesses involved with AI and related technologies helped to boost the sector, not just in July but in May and June as well. She also said some businesses had said that the warm weather and football world cup had affected activity in July, although she said the effects "differed across industries, benefitting some businesses while creating challenges for others". The ONS said that in the three months to July, which gives a better underlying picture, the economy grew by 0.4% compared with the previous three months. Chancellor John Healey said the economy, was "demonstrating a welcome resilience, despite serious global uncertainty". "Our growth although still fragile was the fastest in the G7 in the first half of the year," he added. "But, the conflict in the Middle East does have impacts here at home - from the cost of the weekly family shop to the cost of government borrowing." Healey is to present his first Budget in October. He told BBC News this week that he wants people to confident about the economy, despite acknowledging the challenge of "historic high" borrowing costs. Paul Dales, the chief UK economist at Capital Economics, said July's data showed "the resilience of the economy in the first half of the year continued into the second half". However, he added that higher energy prices and borrowing costs would soon start to hit growth, especially if the rises seen this week are sustained. The Bank of England is meeting next week when it will make its latest decision on interest rates. Economists widely expect rates to be held, but some have predicted a hike before the end of the year. Yael Selfin, chief economist at KPMG, said while the headline growth figure was strong, it "masks a weaker picture for households". "Consumer-facing services contracted in July, as retail and hospitality activity fell following earlier increases in activity in the summer," she said. "Higher energy and fuel prices are likely to place further pressure on household budgets, while elevated mortgage rates will continue to weigh on housing activity and wider consumer spending." Richard Carter, the head of fixed interest research at investment firm Quilter Cheviot, said: "Growth is going to be hard to come by so this may not last, especially as activity is likely to stall ahead of the Budget. "The war in the Middle East continues to drive a lot of the economic data, but the UK is the most exposed to the fallout," he said. "Calls for pro-growth measures will get louder as the Budget nears, but whether or not the government has the room to act remains to be seen."
Read stored source text: BigGo Finance
The UK economy extended its better-than-expected growth streak into July. Despite headwinds from energy cost burdens and surging oil prices driven by Middle East tensions, the services sector powered growth, delivering a third consecutive month of results that beat market forecasts. The UK Office for National Statistics (ONS) announced on the 11th (local time) that July gross domestic product (GDP) rose 0.4% month-on-month. This represents an acceleration from June's 0.3% growth. The result far exceeded the "zero growth" consensus forecast compiled by Reuters from economists. The third straight month of beating market expectations serves as a strong rebuttal to earlier projections that had anticipated a sharp slowdown in the second half of the year. The Bank of England (BOE) had forecast third-quarter growth of just 0.1% in late July. Andrew Bailey, the BOE governor, acknowledged earlier this week in Parliament that "the economic indicators that have come in since then are slightly stronger than expected." Breaking down the data, the services sector grew 0.4% to lead overall expansion, while industrial production and construction output rose 0.2% and 0.1%, respectively. The ONS noted that computer programming was the largest contributing subsector within services. Companies involved in artificial intelligence (AI) and related technologies drove the growth. Research and development and rental activities also contributed positively, while wholesale trade showed a notable decline. On a less volatile three-month basis (May–July), the UK economy grew 0.4%—the same pace as the second quarter but slower than the first quarter's 0.6%. The UK posted the fastest growth rate among G7 nations in the first half of this year. Some analysts caution that this strength may partly reflect insufficient seasonal adjustments, while others note that the direct impact of the US-Iran conflict has been more limited than initially feared. However, with international oil prices surging well past $100 per barrel amid deteriorating Middle East conditions, concerns about reigniting inflation are mounting. The BOE expects inflation to climb to around 3.2% by year-end. UK government bond yields have also spiked to their highest levels in decades, increasing the government's fiscal management burden. For the newly installed Andy Burnham government, this growth figure is welcome news. Prime Minister Burnham is relying heavily on economic growth to generate the tax revenue needed to support ambitious spending plans in defense, public housing, and social security. With household confidence recovery cited as one of the drivers behind the growth, Chancellor John Healey has pledged to streamline regulations to ease the burden on businesses. Healey is set to deliver his first budget on October 28. Economists warn that his fiscal headroom has shrunk considerably as borrowing costs have surged amid a bond market sell-off. There are also concerns that tax increases to plug the fiscal gap could further dampen household and business consumption and investment sentiment. On the monetary policy front, the prevailing expectation is that the BOE will hold its benchmark interest rate at 3.75% at next week's meeting. However, following this week's oil price surge, financial markets have begun pricing in four quarter-point rate hikes over the next 12 months. Expectations have hardened rapidly from just two hikes anticipated at the start of the week. The pound showed little movement immediately after the GDP release. The pound-dollar exchange rate held steady around $1.351. Once added, BigGo Finance appears first in Google Search Top Stories, so you get the broadest, most up-to-the-minute, and most comprehensive global financial news first.
Read stored source text: Devdiscourse
AI-Driven Boost Fuels UK's Fastest Economic Growth Surge In July, the UK economy grew at a swift pace of 1.6%, driven by advances in artificial intelligence and robust performance in computer programming sectors. Despite uncertainties from global conflicts, the economy remains resilient, although concerns about sustained growth persist amidst inflationary pressures. The British economy witnessed its fastest annual growth in 18 months this July, climbing by 1.6% compared to a year earlier, official data revealed. Surpassing economists' 1.2% growth prediction, artificial intelligence and a robust computer programming sector played key roles in this economic advancement. According to the Office for National Statistics, July's 0.4% monthly growth was stronger than expected, with the GDP outperforming in the three months to July. Services sectors, particularly computer programming, significantly contributed to this rise, boosted further by the men's soccer World Cup and unusually warm weather. Economists are divided on whether this momentum will continue in the lead-up to the chancellor's first budget. While some analysts warn growth might slow, others foresee potential upward revisions in full-year growth forecasts following these positive indicators. (With inputs from agencies.)
Read stored source text: Free Malaysia Today
Gross domestic product expanded 0.4% in the month, building on growth of 0.3% in June, the Office for National Statistics said. A consensus of analyst forecasts had been for zero growth in July. GDP output in the three months to the end of July also grew by 0.4%, the ONS said. The data hands a boost to UK Prime Minister Andy Burnham and his finance minister John Healey ahead of the Labour government’s budget update next month. “Ongoing strength in the services sector was only partially offset by falls in both production and construction” in the three months to end in July, Liz McKeown, director of economic statistics at the ONS, said in a statement. “Within services, computer programming was the largest contributor, continuing the strong growth seen throughout the year, with evidence that businesses involved with AI and related technologies helped to boost this sector,” she added. Stay current - Follow FMT on WhatsApp, Google news and Telegram Subscribe to our newsletter and get news delivered to your mailbox. Gross domestic product expanded 0.4% in the month, building on growth of 0.3% in June, the Office for National Statistics said. A consensus of analyst forecasts had been for zero growth in July. GDP output in the three months to the end of July also grew by 0.4%, the ONS said. The data hands a boost to UK Prime Minister Andy Burnham and his finance minister John Healey ahead of the Labour government’s budget update next month. “Ongoing strength in the services sector was only partially offset by falls in both production and construction” in the three months to end in July, Liz McKeown, director of economic statistics at the ONS, said in a statement. “Within services, computer programming was the largest contributor, continuing the strong growth seen throughout the year, with evidence that businesses involved with AI and related technologies helped to boost this sector,” she added.
Read stored source text: Infobae
The United Kingdom's Gross Domestic Product (GDP) expanded by 0.4% in July, a tenth of a point more than in June and four tenths more than in May, according to the National Statistics Office (ONS) reported this Friday. The rebound in activity in the sixth month of 2026 reflected a 0.4% rise in the UK services sector, a 0.2% increase in manufacturing production, and a 0.1% uptick in construction. In this way, the ONS estimated that real GDP grew by 0.4% in the quarter ended in July (May-July) compared with the previous three months (February-April), a period in which it also recorded a 0.4% expansion. The services sector was the main contributor to GDP growth in the May-July quarter, with a 0.6% rise, while construction and manufacturing production fell by 0.5% each.
Read stored source text: MarketScreener España
The UK economy grew in July at its fastest annual pace in 18 months, driven by the surge in artificial intelligence. According to official data published on Friday, the country also extended its solid first-half profitability despite the difficulties stemming from the war between the United States and Iran. These figures provide support for the new Finance Minister, John Healey, ahead of presenting his first budget on October 28, a date that risks being overshadowed by higher public debt costs and rising oil prices. The data could also increase some Bank of England officials' willingness to consider a rate hike before the year end. Britain's GDP stood 1.6% higher in July than a year earlier, the fastest annual growth since February 2025 and above economists’ forecast of 1.2%, according to the Office for National Statistics (ONS) on Friday. On a monthly basis, the economy grew 0.4% in July, versus the Reuters poll’s expectation of flat production. Growth in the quarter to July —which smooths data volatility— was also stronger than expected, at 0.4%. “The UK's economy has shown much better profitability than anticipated amid the consequences of the war with Iran,” said James Smith, developed markets economist at ING, who noted that inflation has risen less sharply than initially forecast. AI-Driven Firms Fueling Growth Much of the growth over the last three months appears to come from software companies benefiting from the AI boom, explained Liz McKeown, ONS Director of Economic Statistics. "If we look at the latest month, the services sector also boosted July growth, with software again making the largest contribution," added McKeown, who also pointed to an extra lift for some firms thanks to the Men's World Cup and unusually hot weather. In response to the data, Healey said the economy is showing a “welcome resilience,” though warned that growth is “still fragile.” The pound barely moved against the dollar after the data, while economists showed split opinions on whether the current UK growth spurt can be sustained over time. In the first half of 2026, the UK economy grew 1%, the fastest growth among G7 countries. Some analysts think this could partly reflect seasonal effects not fully adjusted. “We are starting to reach the point of the year where we expect growth to run out,” said Matt Swannell, chief macroeconomic adviser at ITEM Club. However, other experts were more optimistic. "The growth story for the UK is increasingly hard to ignore," said Sanjay Raja, Deutsche Bank UK chief economist. Following the latest data, analysts may revise up their full-year growth forecast by 0.1 percentage points, he added. Many economists believe UK productivity growth —a key driver of long-term economic profitability and living standards— is beginning to recover after two decades of decline, though it is still early and there is no clear consensus on the causes. The Shadow of the Iran War In July, the Bank of England forecast the economy would expand by 1.1% in 2026 as a whole. This week, its governor, Andrew Bailey, told a parliamentary committee that the data published since then have been “somewhat stronger” than expected. Consumer and business activity confidence indicators also strengthened over the summer, after Prime Minister Andy Burnham took over from his Labour predecessor Keir Starmer. Like other European economies, the UK has felt a smaller immediate impact on growth from the US-Israel-Iran war than economists initially feared. Nevertheless, the conflict has driven oil prices above $105 per barrel this week, with the resulting impact on public debt costs, which are now at multi-decade highs. The Bank of England expects inflation to rise to around 3.2% by the end of this year. Almost all economists surveyed by Reuters expect the Bank of England to keep interest rates unchanged next week and for the rest of the year, but financial markets see a near certainty of a rate increase in November due to higher inflationary pressures.
Read stored source text: Reuters
LONDON, Sept 11 (Reuters) - Britain's economy grew at the fastest annual pace in 18 months in July, helped by a boost from artificial intelligence and extending a strong first-half performance despite headwinds from the U.S.-Iran war, official figures showed on Friday. The figures offer a boost to new finance minister John Healey ahead of his first budget on October 28 – which risks being overshadowed by soaring government borrowing costs and surging oil prices – and may make some Bank of England officials more willing to consider a rate hike before the end of the year. Sign up here. British gross domestic product in July was 1.6% higher than a year earlier, the fastest annual growth since February 2025 and above economists' 1.2% forecast, the Office for National Statistics showed on Friday. The economy grew 0.4% on the month in July, compared with median expectations in a Reuters poll for unchanged output, and growth in the three months to July – which smooths volatility – was also stronger than expected at 0.4%. "The UK economy has performed much better than expected amid the fallout of the Iran war," said James Smith, developed markets economist at ING, noting that inflation had risen less steeply than first predicted. BUSINESSES BENEFITING FROM AI HELP LIFT GROWTH Much of the growth over the past three months appeared to come from businesses involved in computer programming that were benefiting from the AI boom, the ONS' director of economic statistics, Liz McKeown, said. "Looking at the latest month, services also drove growth in July, with computer programming again making the largest contribution," she added, noting an extra boost for some firms from the men's soccer World Cup and unusually hot weather. Responding to the data, Healey said the economy was showing "welcome resilience" but that growth was "still fragile". Sterling was little changed against the U.S. dollar after the data and economists had mixed views about whether Britain's current economic outperformance would be sustained. In the first half of 2026, Britain's economy expanded by 1%, the fastest growth across the Group of Seven large advanced economies, and some analysts believe this may in part reflect seasonal effects that have not been fully adjusted for. "We're starting to reach the point in the year where we expect growth to peter out," said Matt Swannell, chief economic adviser to forecasters ITEM Club. But others were more positive. "The UK growth story is becoming harder to ignore," said Deutsche Bank Chief UK Economist Sanjay Raja. Forecasters were likely to revise up their expectations for full-year growth by 0.1 percentage points after the latest data, he added. Many economists think British productivity growth – a key driver of longer-term economic performance and living standards – is beginning to recover after a 20-year decline though it remains early days and there is no clear consensus on the cause. SHADOW OF IRAN WAR In July, the Bank of England predicted the economy would expand 1.1% over 2026 as a whole, and this week Governor Andrew Bailey told a parliament committee that economic data since then had come in "a bit stronger" than he had expected. Measures of consumer confidence and business activity also strengthened over the summer after Prime Minister Andy Burnham took over from his Labour predecessor Keir Starmer. Britain, like other European economies, has taken less of an immediate hit to growth from the U.S.-Israeli war on Iran than economists had feared at the outset. But the conflict this week pushed oil prices above $105 a barrel with knock-on impacts on government borrowing costs, which are now at multi-decade highs, and the BoE expects inflation to rise to around 3.2% later this year. Almost all economists polled by Reuters expect the BoE to keep interest rates on hold next week and for the rest of this year, but financial markets think it is near certain that rates will rise by November due to stronger inflation pressures. Reporting by David Milliken and Andy Bruce; Editing by William James, Kate Mayberry and Alison Williams Our Standards: The Thomson Reuters Trust Principles.
Read stored source text: Sky News
Rising energy costs are threatening a slowdown in the months ahead as the ONS figures suggests resilience to date. Business and economics reporter@SkyNewsBiz Friday 11 September 2026 09:01, UK The UK economy recorded 0.4% growth in July, partly on the back of artificial intelligence (AI) investment, according to early official figures that outperformed expectations. The Office for National Statistics (ONS) said output accelerated - on the back of 0.3% growth the previous month - as growth in services offset declines elsewhere. Economists had widely expected zero growth to be recorded in July. Money latest:The misunderstanding at the heart of the seven-year gifting rule For more information about how we use your data and your rights, you can visit ourPrivacy Centre. ONS director of economic statistics, Liz McKeown, said: "Within services, computer programming was the largest contributor, continuing the strong growth seen throughout the year, with evidence that businesses involved with AI and related technologies helped to boost this sector. "Continuing recent trends, research and development and rental and leasing also helped drive growth, while wholesaling saw a notable fall." AI investment, led by data centre spending and increased AI use among firms, has propped up growth since the spring as the economy has increasingly grappled with the effects of the conflict in the Middle East. Those effects have intensified markedly this week. Oil prices are set to end this week above $100 a barrel for the first time since mid-May while wholesale natural gas costs are at levels not seen for four years. The supply squeeze caused by the war is front and centre of financial market attention and the implications for the months ahead are a cause of great concern. The energy price-driven cost of living crisis that followed Russia's invasion of Ukraine is fresh in the mind and a hangover has always remained. Like in 2022, gas is the main cause for concern, as it is the main driver of the energy price cap due to its importance in creating power and heating homes. Rising oil prices are already being seen at the fuel pumps and for home heating. The fear will be that higher energy prices become ingrained in the economy, with manufacturers and service providers passing them on down supply chains to already-squeezed consumers. Hikes to inflation - and therefore interest rate rise expectations - are already hurting government borrowing costs and the cost of servicing existing debt. Be the first to getBreaking News Install the Sky News app for free A 30-year bond sale this week saw the highest yield paid since 1998. It all threatens the chancellor John Healey's wriggle room heading into next month's budget, though he pointed, in a speech this week, to an "optimistic story" for a UK economy that was "turning a corner". Felix Feather, economist at wealth manager Aberdeen, said of the ONS figures: "Economic activity has held up surprisingly well against the effects of the energy cost shock so far, with the data persistently outperforming expectations. "These figures will go some way to reassuring Bank of England policymakers that the current level of rates is not meaningfully restricting growth, which in turn suggests that rates could be moved higher without causing undue economic scarring. "We therefore expect the Bank to move to contain high inflation with a 25 basis point hike in November after holding next week."
Read stored source text: SWI swissinfo.ch
The British economy surprises in July with a 0.4% growth The United Kingdom registered an unexpected 0.4% growth in its GDP in July, well above market forecasts that pointed to a stagnation in activity. The advance was driven by the services sector and, in particular, IT programming, thanks to companies linked to artificial intelligence, the National Statistics Office (ONS) said on Friday. The data comes after a 0.1% contraction in April, zero growth in May, and a 0.3% expansion in June. "The British economy has defied expectations," said Richard Carter of Quilter Cheviot, noting that July benefited from a particularly warm climate and also from the England team reaching the semifinals of the Football World Cup. "Markets are now focusing on the budget," which Finance Minister John Healey will present on October 28, he added. Healey pledged on Monday to maintain strict fiscal discipline, in an attempt to reassure financial markets amid rising borrowing costs. The budget is highly anticipated by both British citizens and the business world, which speculates about possible household aid and potential tax increases. "Being true to our values means being honest about the need to control public spending," Healey said then, as he avoided commenting on the possibility of introducing new taxes. In addition to the high level of debt, the government's room for maneuver is limited by an inflation spike fueled by the conflict in the Middle East, which has led to higher hydrocarbon prices. zap/lth/mb/ahg/avl
Read stored source text: Tech Digest
The UK economy defied forecasts growing by 0.4% in July, heavily driven by the rapid growth of artificial intelligence and related technology sectors. Economists had previously predicted zero growth for the month, but the figures delivered a welcome boost forChancellor John Healeyas he prepares for his first Budget. According to data from the Office for National Statistics (ONS), the stronger-than-expected performance was largely down to the services sector, which grew by 0.4%. Within that sector, computer programming, consulting, and administrative services stood out, with the ONS noting that many businesses reporting the largest turnovers were heavily involved inartificial intelligence and cloud computing. Experts have welcomed the technology-driven surge as a vital sign of economic productivity. Martin Beck, chief economist at WPI Strategy, noted that at a time when traditional parts of the economy remain subdued, this represents “exactly the kind of productivity-enhancing spending the UK needs more of.” Similarly, PwC’s chief economist, Barret Kupelian, pointed out that artificial intelligence continues to leave clear imprints across the wider economy, helping AI-exposed sectors record robust outputs. Despite the positive headline figures, analysts warn that broader economic challenges remain. Ongoing global uncertainty – including the fallout from conflict in the Middle East – continues to drive up energy costs and government borrowing expenses, placing mounting pressure on household budgets and public finances. However, July’s data underscores how digital innovation and the burgeoning AI sector are increasingly acting as a crucial shock absorber for the British economy. Subscribe to get the latest posts sent to your email. Type your email… Subscribe
Read stored source text: The Guardian
The UK economy grew in July as the rapid expansion of AI appeared to outweigh the economic damage from the Iran war, in a welcome boost for John Healey. Figures from the Office for National Statistics (ONS) showed a surprise 0.4% increase in gross domestic product (GDP), compared with 0.3% growth in June. City economists had forecast zero growth. The figures suggested the economy continued to be robust despite the fallout from the Iran war, which has raised energy costs and led to higher interest rates than were expected at the start of the year. The ONS said the expansion in July was driven by growth of 0.4% in the services sector, particularly admin services, and computer programming and consulting. Within the latter sector, it said: “Many of the businesses reporting the largest turnover in July 2026 are involved in activities related to artificial intelligence and cloud computing.” Martin Beck, the chief economist at WPI Strategy, said: “At a time when many traditional parts of the economy remain subdued, this is exactly the kind of productivity-enhancing spending the UK needs more of.” PWC’s chief economist, Barret Kupelian said: “Artificial intelligence continues to have imprints across the UK economy, with AI exposed sectors – professional services, information technology, administrative services – recording strong growth.” The ONS said industrial production was also up in July, by 0.2%, with a rise in manufacturing output offsetting falls in mining, and electricity and gas supply. Over the three months to July – a period the ONS says is more representative of economic conditions – GDP growth was also 0.4%, the same pace as in the three months to June. Sanjay Raja, the chief UK economist at Deutsche Bank, said: “The UK growth story is becoming harder to ignore. Households and businesses are still spending – despite the unfolding energy shock impacting disposable incomes.” The economy’s continued strength is good news for Healey, the chancellor, as he prepares for his first budget on 28 October, though experts have warned that the longer-term picture for the economy is less positive. Healey said: “Britain’s economy is demonstrating a welcome resilience, despite serious global uncertainty. Our growth although still fragile was the fastest in the G7 in the first half of the year. But, the conflict in the Middle East does have impacts here at home – from the cost of the weekly family shop to the cost of government borrowing.” Economists fear the latest rise in the global oil price – to well above $100 a barrel – is likely to stoke higher inflation worldwide, prompting rising borrowing costs. Higher interest rates on the UK’s debt are expected to have wiped out at least half of the £24bn headroom Healey’s predecessor had built up against the fiscal rules – potentially forcing him to increase taxes or cut spending at the budget. Since the recent jump in oil prices, markets have raised their expectations for future interest rates and now expect the Bank of England’s policymakers to make four quarter-point rises over the next twelve months. Rates are still expected to remain on hold, at 3.75%, when the Bank’s nine-member monetary policy committee meets next week, however, despite the stronger-than-expected growth figures. Suren Thiru, the chief economist at the accountancy body the ICAEW, said: “While these figures may strengthen the hawkish mood among rate-setters, a September rate rise still looks unlikely as most policymakers remain hopeful that a sluggish economy will ultimately help bring inflation under control, despite escalating US-Iran tensions.” As well as strong growth in AI-related sectors, the ONS highlighted the economic impact of the summer heat, and the World Cup, which culminated in mid-July. Its director of economic statistics, Liz McKeown, said: “some businesses reported that the warm weather and Fifa World Cup had affected their activity, although effects differed across industries, benefiting some businesses while creating challenges for others.” The shadow chancellor, Andrew Griffith said: “Nobody in this Labour government should be high-fiving themselves. Our construction and production sectors are shrinking, unemployment is up under Labour, and we’ve got the highest government borrowing rates in almost 30 years.”
Read stored source text: The Independent
The UK economy unexpectedly grew by 0.4% in July following a boost from the services industry and businesses increasing the use of AI, official figures show. The Office for National Statistics (ONS) released the latest gross domestic product (GDP) data, which was up from a 0.3% growth rate in June. It marks a surprise uplift after economists were expecting the economy to show zero growth for the month. The figures will come as welcome news to Chancellor John Healey who earlier this week insisted that the UK economy was “turning a corner”, as he prepares to deliver his first autumn Budget statement next month. The ONS said the services sector drove growth in July, with output increasing by 4%, and computer programming making the largest contribution. Artificial intelligence (AI) and related technology has helped to boost the sector over the past three months, according to the ONS. Its evidence showed that across computer programming, consultancy and IT activities, many of the businesses reporting the largest turnover in July were involved in activities related to AI and cloud computing. It comes amid a wider AI investment boom, with businesses increasingly spending on infrastructure and training to accelerate their use of the technology. GDP growth in July was also helped by a 0.2% increase in production output, driven by growths in manufacturing and water supply, including sewerage and waste management, the ONS said. Construction output also increased by 0.1%, helped by housing repair and maintenance work. Meanwhile, the impact from the heatwaves on spending in pubs and restaurants was down in July compared with June, which had been helped by record hot weather and the Fifa World Cup kicking off. ONS director of economics statistics Liz McKeown said that “some businesses reported that the warm weather and Fifa World Cup had affected their activity, although effects differed across industries, benefitting some businesses while creating challenges for others”. Mr Healey said: “Britain’s economy is demonstrating a welcome resilience, despite serious global uncertainty.” He referred to the Iran war which he said “does have impacts here at home – from the cost of the weekly family shop to the cost of Government borrowing”. Government long-term borrowing costs have risen to their highest levels in 28 years in recent weeks. “We are shifting power to local communities to generate growth in more places and backing business to succeed with more investment, innovation and jobs,” Mr Healey said. “This is the route to raising living standards and delivering good growth in every postcode.” Yael Selfin, chief economist for KPMG, said: “Despite strong activity in July, the headline growth figure masks a weaker picture for households.” She pointed to the consumer-facing services, like retail and hospitality, which marked falls in July following an earlier summer boost. “Higher energy and fuel prices are likely to place further pressure on household budgets, while elevated mortgage rates will continue to weigh on housing activity and wider consumer spending,” she said. This could cause momentum to slow in August and September, she cautioned. Suren Thiru, chief economist for the Institute of Chartered Accountants England and Wales (ICAEW), said Mr Healey could be left with a “Budget headache” if economic growth starts to dwindle, “as more muted growth and surging borrowing costs erode his fiscal headroom, raising the prospect of further tax rises”. Mr Healey is set to deliver his autumn Budget for taxes and spending on October 28, at a time when household energy bills are expected to rise following the new Ofgem price cap taking effect.
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Suddenly... the British economy grows by 0.4% in July 12:34 - September 11, 2026 Official data showed the British economy grew unexpectedly by 0.4% in July, driven by the services sector and increased use of artificial intelligence by companies. The Office for National Statistics revealed the latest gross domestic product data, which rose from a 0.3% growth rate in June, according to the British News Agency. This growth is surprising after economists had expected the economy not to grow in July. The Office for National Statistics said the services sector drove growth in July, with output rising by 4%, and computer programming being the largest contributor to growth. The office added that artificial intelligence and related technologies helped bolster the sector over the past three months. It also noted that GDP growth in July was driven also by a 0.2% increase in total output due to growth in manufacturing and water supply including sanitation and waste management. Construction output also rose by 0.1%, driven by home repairs and maintenance work. On the other hand, the impact of heatwaves on spending in pubs and restaurants in July declined compared with June. The Office for National Statistics also noted that GDP for the three-month period to the end of July also grew by 0.4%. The data provide a boost to British Prime Minister Andy Burnham and his Chancellor of the Exchequer, for the Labour government to update the budget next month. Elizabeth MacKinnon, Director of Economic Statistics at the Office for National Statistics, said in a statement, “The sustained strong performance of the services sector has not been offset in part only by a decline in the manufacturing and construction sectors over the three months to July.” She added, “In the services sector, computer programming activity was the largest contributor to growth, continuing the strong performance it has shown over the year, with indications that AI-related technologies and companies in the AI field have contributed to strengthening this sector.”