UK GDP grows 0.7% in third quarter of 2026

Key Points:

• The U.K. economy grew by 0.7% in the third quarter of 2026, matching economists' expectations and driven primarily by a 0.9% expansion in the services sector, particularly in information and communication industries linked to AI and cloud computing.
• Year-on-year, the economy grew 1.9% for the three months to September, showing slight improvement from previous quarters, with production growing modestly and construction contracting by 0.7%.
• Finance Minister John Healey highlighted the U.K.'s resilience amid global challenges like the U.S.-Iran conflict, while experts caution that upcoming economic headwinds and geopolitical uncertainties may impact future growth and confidence.
• The Bank of England recently raised interest rates for the first time in three years, with inflation concerns and robust GDP growth keeping further rate hikes likely, as markets price in a high probability of another increase in December.
• Economists noted that AI investment has acted as an additional growth driver, helping businesses strengthen resilience against economic challenges, supporting the case for continued monetary tightening despite global uncertainties.