UK Economy Rises 0.4% in July as Services Sector Drives Growth

The UK economy defied expectations by growing 0.4% in July, its fastest rate of growth among G7 countries in the first half of this year.

This surpasses economists' forecasts for a flat month after 0.4% growth in June, according to figures from the Office for National Statistics.

Ongoing strength in the services sector was partially offset by falls in both production and construction, but artificial intelligence seemed to be lifting software development activity, with annual output up 1.6%, the fastest since February 2025.

The Bank of England forecasts the economy will expand 1.1% over 2026 as a whole, but Governor Andrew Bailey said economic data has come in 'a bit stronger' than expected recently.