UK GDP Beats Forecasts with 0.4% Growth in July Driven by Services and Tech
Key Facts
In a move reflecting the resilience of the British economy against inflationary pressures, official data showed UK GDP growth accelerated to 0.4% month-on-month in July. According to reports, this figure significantly outperformed consensus expectations of zero growth, marking the eighth consecutive three-month expansion period. The growth was primarily underpinned by the services sector, which expanded by 0.4%, while the production and construction sectors grew by 0.2% and 0.1% respectively.
At the sub-sector level, manufacturing saw a notable rebound with 8 out of 13 sub-sectors expanding, led by a 5.2% surge in electronic and optical products. Computer programming and consultancy activities contributed substantially to the headline figure. The Office for National Statistics noted that firms involved in artificial intelligence and cloud computing reported strong turnover, helping offset a 1.0% decline in wholesale and retail trade.
The economic calendar shows markets are processing recent mixed signals from the UK, including a Construction PMI of 44.3 recorded in early September and a 0.2% decline in the House Price Index as of September 7, 2026. These growth figures remain a critical catalyst for assessing the Bank of England's future policy path.
Latest Updates · 2
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Update: Additional reports indicate that the growth pace recorded in July is the fastest for the UK economy since early 2025. This robust performance, bolstered by artificial intelligence innovations, strengthens expectations regarding the ability of emerging tech sectors to drive long-term economic recovery in the United Kingdom.
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Update: On an annual basis, UK GDP growth accelerated to 1.6% in July, surpassing market expectations of 1.0%. This robust performance compares favorably to the 1.1% annual growth recorded in the previous month, further strengthening the outlook for the economy's long-term recovery pace.