UK economy grows 0.4% in July, beating forecasts

The United Kingdom's economy grew by 0.4% in July, exceeding economist forecasts that had predicted stagnation. This performance follows a 0.3% increase in June and marks the eighth consecutive three-month expansion.

Growth was primarily driven by the services sector, particularly in computer programming and technology-related activities. Officials noted that the artificial intelligence boom and cloud computing have significantly boosted business-facing services. Other contributing factors included unusually warm weather and activity related to the men’s soccer World Cup, which benefited the hospitality sector.

In the manufacturing sector, output saw a rebound, rising 0.9% in July. While the services sector remains the primary engine of growth, the Office for National Statistics noted that wholesale and retail trade experienced a decline.

In the first half of 2026, the UK recorded a 1% expansion, making it the fastest-growing economy among the G7 nations. Despite this momentum, some analysts caution that growth may slow as seasonal effects stabilize and international economic pressures persist.