UK economy grows 0.4% in July, boosted by AI-linked services

September 11, 2026 at 11:13 AM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

The UK economy expanded by 0.4% in July, the Office for National Statistics said, beating economists' forecasts of no growth. The services sector, particularly computer programming, drove the expansion. The growth came despite pressures from the war in Iran and high energy prices.

Key Facts

The UK economy grew by 0.4% in July, according to the Office for National Statistics.
Economists had predicted no growth for July.
The services sector, particularly computer programming, helped drive the expansion.
In the three months to July, the economy grew by 0.4% compared with the previous three months.
Chancellor John Healey said growth was the fastest in the G7 in the first half of the year.

July Growth Details

The Office for National Statistics reported that the UK economy expanded by 0.4% in July, following growth of 0.3% in June and zero growth in May. ONS director of economic statistics Liz McKeown said there was evidence that businesses involved with AI and related technologies helped boost the sector in May, June, and July. McKeown also noted that some businesses said the warm weather and football World Cup affected activity in July, with effects differing across industries.

Economic Outlook

Chancellor John Healey said the economy was demonstrating welcome resilience despite serious global uncertainty, and that growth was the fastest in the G7 in the first half of the year. Healey is to present his first Budget in October and told BBC News this week that he wants people to be confident about the economy despite historic high borrowing costs. Paul Dales, 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. Dales added that higher energy prices and borrowing costs would soon start to hit growth, especially if the rises seen this week are sustained. Yael Selfin, chief economist at KPMG, said the headline growth figure masks a weaker picture for households, as consumer-facing services contracted in July.