UK Economy Beats Expectations with 0.4% Growth in July

The UK economy has defied expectations by growing 0.4% in July, according to new data from the ONS.

This growth was driven by all three sectors: services, production, and construction. Services continued to do most of the heavy lifting, with a gain of 0.6% over the three months to July.

A notable contributor to this growth is the increasing use of AI in businesses, particularly in computer programming, consultancy, and related activities, which jumped 3.5% in July.

However, experts are cautious about the sustainability of this growth due to ongoing inflation concerns and the looming Budget at the end of October.

Richard Carter from Quilter Cheviot warns that activity is likely to stall ahead of the Budget, while Susannah Streeter from Wealth Club notes that the spectre of stagflation still looms over the UK economy.