U.K. economy grows 0.7% in Q3, up from 0.5% and in line with forecasts
The U.K. economy grew 0.7% in the third quarter, its fastest pace since at least the start of 2025.
Growth picked up from 0.5% in Q2. Gross domestic product measures the value of all the goods and services the economy produces.
Economists had expected 0.7%, and output was 1.9% higher than a year earlier.
Services did most of the work, with output up 0.9%. Business-facing services such as rental and leasing, IT, and consulting grew faster than consumer-facing ones like shops and restaurants. Construction shrank 0.7% as private homebuilding fell.
The Office for National Statistics says information and communication have been the largest drivers of growth this year, and that "many of the businesses reporting the largest increases in turnover are involved in activities related to artificial intelligence and cloud computing."
On the spending side, household consumption grew 0.6%. Fixed investment, which covers spending on machinery, equipment, and buildings, grew 1.7%.
The quarterly growth suggests a recent uptick in the economy, as monthly figures show GDP grew 0.2% in September after no growth in August.
The data come a week after the Bank of England raised its key rate to 4%, citing high energy prices and stronger-than-expected activity. In its November report, the Bank had already pencilled in 0.7% for Q3, up from 0.1% in its July projection.
The Bank expects growth to slow in Q4 and in 2027 as higher inflation, tighter financial conditions, and fiscal tightening weigh on GDP.
Sanjay Raja, chief U.K. economist at Deutsche Bank (DB), said before the release, "Looking ahead, we expect the U.K. economic growth story to have cooled a bit."
The pound was down 0.2% against the dollar, as of 7:17 a.m. London time.
Sources & Further Reading
- "GDP first quarterly estimate, UK: July to September 2026." Office for National Statistics. November 12, 2026.
- "UK economic growth expected to have picked up amid AI and defence drive." The Independent. November 11, 2026.
- "GDP monthly estimate, UK: September 2026." Office for National Statistics. November 12, 2026.
- "Monetary Policy Summary and minutes of the Monetary Policy Committee meeting, November 2026." Bank of England. November 5, 2026.
- "Monetary Policy Report, November 2026." Bank of England. November 5, 2026.
This article was drafted with the help of AI. Gabe Dunsmith fact-checked, edited and published the article and is responsible for its accuracy and quality. How we use AI
