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AI spending helps lift UK growth to fastest since early 2024
Reuters • • world
Key Points:
- Britain's economy grew by 0.7% in Q3 2026, the fastest rate in two-and-a-half years, driven largely by investment in artificial intelligence and strong performance in computer programming and manufacturing sectors.
- Annual GDP growth rose to 1.9% in Q3, the highest since late 2024, with Britain showing the second-fastest growth among G7 countries, just behind the United States.
- Despite headwinds from higher energy prices and borrowing costs, the Bank of England upgraded its 2026 growth forecast to 1.6%, citing AI-related spending and fiscal support from the recent budget.
- Consumer confidence and retail sales have weakened recently due to prolonged high energy prices, with household energy bills expected to rise about 25% in January despite falling oil prices.
- The strong economic data increases the likelihood of further Bank of England interest rate hikes, with markets pricing in a high chance of another rate increase in December and additional hikes next year.
