The UK economy grew by 0.7 per cent in the third quarter of 2026, recording its best performance since the start of 2024. The main driver was the services sector, particularly computer programming and technology companies whose activities are linked to artificial intelligence and cloud computing. Despite rising energy and borrowing costs, the UK economy is growing faster than the Bank of England had previously anticipated.
- The UK’s GDP rose by 0.7 per cent in the third quarter of 2026.
- This is the fastest quarterly growth in the UK economy since the start of 2024.
- The services sector grew by 0.9 per cent, whilst computer programming and related services grew by 4.4 per cent.
- Statisticians attribute part of this growth to the development of artificial intelligence and cloud technologies.
- The Bank of England has raised its economic growth forecast for 2026 to 1.6 per cent.
The British economy has accelerated its growth to 0.7 per cent
According to figures for July–September, the UK’s gross domestic product rose by 0.7 per cent compared with the previous quarter. In April–June, growth stood at 0.5 per cent, whilst in the first three months of the year it was 0.6 per cent.
On an annual basis, the UK economy grew by 1.9 per cent. The figure was in line with the expectations of economists surveyed by Reuters.
The services sector made the largest contribution, growing by 0.9 per cent over the quarter. Industrial production rose by 0.1 per cent, whilst the construction sector contracted by 0.7 per cent.
In September, the economy grew by 0.2 per cent following zero growth in August. Thus, the acceleration in the third quarter was largely driven by activity among businesses targeting corporate clients.
Artificial intelligence has become one of the drivers of economic growth
According to the ONS, the information and communications sector grew by 2.1 per cent in the third quarter. The strongest growth within the sector was seen in computer programming, consultancy and related services, which rose by 4.4 per cent.
The statistics office notes that, amongst the companies with the highest growth in turnover, a significant proportion are businesses linked to artificial intelligence and cloud technologies.
Over the past seven months, it has been the programming sector and related services that have made the largest contribution to UK GDP growth among individual sectors. In the third quarter alone, this contribution amounted to around 0.15 percentage points.
At the same time, British statisticians are not yet able to determine precisely what proportion of economic growth is directly attributable to artificial intelligence. To this end, the ONS is developing a separate methodology for assessing the impact of AI on the economy.
The Bank of England has revised its forecast upwards, but risks remain
Against a backdrop of more resilient economic activity, the Bank of England has raised its GDP growth forecast for 2026 to 1.6 per cent. This is higher than the estimate by the UK’s Office for Budget Responsibility, which expects growth of 1.2 per cent.
One of the factors behind the review was investment in artificial intelligence. At the same time, economists are warning of a likely slowdown towards the end of the year due to high energy prices and rising borrowing costs.
Certain indicators are already pointing to a weakening in consumer demand. Retail sales volumes fell in September, whilst consumer confidence, ahead of the budget being approved, suffered its sharpest monthly decline since April 2020.
