UK Economy Grows Fastest Rate Since 2024 as AI Lifts Services
UK GDP rose 0.7% in the three months to September, the fastest pace in more than two years, official figures show. AI-linked computer programming led the gain, while economists warn that higher energy bills could slow growth early next year.
The UK economy grew 0.7% in the three months to September, its fastest rate in more than two years, according to official figures published on November 12, 2026.
Growth accelerated from the previous quarter. The result suggests the economy proved far more resilient over the summer than expected.
What drove the growth
Services did the heavy lifting. The Office for National Statistics (ONS) said the quarter was driven almost entirely by strong, widespread growth in the sector, led by information technology. Services rose 0.9% over the quarter.
Computer programming posted its fastest growth in three years, helped by spending linked to artificial intelligence. The information and communication sector grew 2.1% in the quarter. The ONS said it has been the largest driver of GDP growth across 2026.
Monthly figures were also better than forecast. The economy grew 0.2% in September, against forecasts of zero growth. The ONS revised August growth down from 0.1% to zero.
The quarterly rate matched economists' expectations. It was the fastest since the first three months of 2024, when GDP also rose 0.7%.
Construction a drag
Not every sector kept pace. A sharp drop in construction pulled growth down, even though the industry makes up only about 6% of economic activity. Work on new projects has fallen more than 7% from mid-2025, and private housebuilding is down 30% from its 2022 high.
Reaction
Prime Minister Andy Burnham called the figures "welcome news". Chancellor John Healey said the UK was showing "standout resilience" and that the economy was growing at its fastest rate in almost 10 years, excluding the pandemic period.
Sanjay Raja, chief UK economist at Deutsche Bank, said GDP is up 1.8% so far this year. Stripping out the pandemic years, he said, you have to go back to 2017 to find the economy running this hot. The UK has lost its title as the fastest-growing G7 economy this year to the US, "but only just", he added.
Grant Fitzner, the ONS chief economist, said it was "possible growth could have been even stronger" without the war in the Middle East. He cautioned that households may not feel better off, because inflation and wages affect them more directly.
Warnings ahead
Jake Finney, senior economist at consultancy PwC, said growth was likely to slow in the coming months "unless energy markets stabilise". A sharp rise in energy bills is forecast for January. He said that is likely to hit consumer spending and confidence.
Suren Thiru, chief economist at the accountancy body ICAEW, described the third quarter as "strikingly strong". He said households appeared to be drawing on savings to keep spending despite rising inflation.
James Smith, an economist at ING, said much of the rise in investment can be traced to IT and professional services, which have grown rapidly this year despite shedding staff. "IT is very clearly a datacentre story," he said, adding that he expects it to remain an area of outperformance in 2027.
Richard Benc, founder of mechanical watch company Studio Underdog, said sales have beaten his forecasts. "We've seen a surprising amount of resilience, particularly from our US customers," he said, although some UK customers are now taking longer to buy.
