UK Economy Grows 0.7% in Q3 as AI Services Drive Fastest Expansion in 2.5 Years
Updated
Updated · The Guardian · Nov 12
UK Economy Grows 0.7% in Q3 as AI Services Drive Fastest Expansion in 2.5 Years
3 articles · Updated · The Guardian · Nov 12
Summary
Britain’s GDP rose 0.7% in July-September, matching forecasts and marking the strongest quarterly growth since early 2024, while September alone added 0.2% against expectations for no growth.
Services drove almost all of the expansion, rising 0.9%, with information and communication up 2.1% as AI, cloud computing and datacentre-related activity lifted IT and back-office work.
Production added a modest 0.1%, but construction dragged on growth as new project work has fallen more than 7% since mid-2025 and private housebuilding is down 30% from its 2022 peak.
The stronger data has sharpened expectations for another Bank of England rate increase in December after last week’s move to 4%, even as higher fuel and electricity costs keep inflation pressure elevated.
Economists said the UK has grown 1.8% so far in 2026 and remains near the top of the G7, though some warned rising rates and energy bills could test households and slow momentum next year.