UK GDP rises 0.7% as tech services lead third-quarter growth

UK gross domestic product rose 0.7% in the third quarter from the previous quarter, the Office for National Statistics said in a data release on Thursday.

The ONS data matched expectations and improved on revised 0.5% growth in the second quarter, adding to evidence of resilience after the Bank of England lifted rates to 4% last week.

Output was 1.9% higher than a year earlier. GDP grew 0.2% in September after no growth in August, showing momentum at the end of the July-to-September period.

Services, the largest part of the British economy, rose 0.9% in the quarter. Computer programming, consultancy and related activities increased 4.4%, helping information and communication output grow 2.1%.

The ONS said computer programming, consultancy and related activities had been “the largest driver of GDP growth across 2026, with evidence that many of the businesses reporting the largest increases in turnover are involved in activities related to artificial intelligence and cloud computing.” The statistics office said the precise contribution from those technologies was hard to quantify.

Sarah Coles, head of personal finance at AJ Bell, said in the Euronews article: “Given the global backdrop, the rising cost of living, and the fact we were heading for the uncertainty of the Budget, growth held up well in the third quarter. And AI continued to do a significant portion of the heavy lifting.”

Production output edged up 0.1%, while construction output fell 0.7%. Manufacturing grew 0.9% in the three months to September, led by a 4.6% rise in output of computer, electronic and optical products.

Coles said investors remain concerned that heavy AI spending may not generate lasting profits, while adoption is already helping some UK businesses, including administrative and support services. Referring to computer, electronic and optical manufacturers, she said: “It’s another area where growth is underpinned by demand for AI.”

UK Chancellor John Healey said in response to the figures: “The Middle East conflict has hit growth worldwide, yet Britain is showing stand-out resilience.” The UK is the world’s fifth-largest economy by nominal GDP, behind the US, China, Germany and Japan.

The Bank of England last week raised its annual UK growth forecasts to 1.6% for 2026 and 1.3% for 2027, from 1.1% for both years in July. The central bank said AI-related spending had supported business investment.

The Bank also raised its benchmark interest rate by 25 basis points to 4%, its first increase since August 2023. UK inflation reached 3.5% in September, partly because of higher household energy bills and motor fuel prices.

Kit Rees, an investment strategist at Quilter, said in the Euronews article that growth remained “robust, if unspectacular by historic standards”. He said higher employment costs, rising energy prices and pressure on household budgets were likely to weigh on the economy into 2027.

Source: Office for National Statistics data release reported by Euronews, Nov. 12, 2026