UK economy grows unexpectedly in July

The UK economy unexpectedly grew by 0.4 per cent in July following a boost from the services industry and businesses increasing the use of artificial intelligence, according to official figures.

The Office for National Statistics says gross domestic product data was up from a 0.3 per cent growth rate in June.

The services sector drove growth, with output increasing by four per cent, and computer programming making the largest contribution.

According to Office for National Statistics findings, many of the businesses reporting the largest turnover in July were involved in activities related to artificial intelligence and cloud computing.

GDP growth was also helped by a 0.2 per cent increase in production output, driven by growths in manufacturing and water supply, including sewerage and waste management.

Construction output also increased by 0.1 per cent, helped by housing repair and maintenance work.

Meanwhile, the impact from the heatwaves on spending in pubs and restaurants was down compared with June, which had been helped by record hot weather and the Fifa World Cup.

Yael Selfin, KPMG chief economist, said: “Despite strong activity in July, the headline growth figure masks a weaker picture for households.

“Higher energy and fuel prices are likely to place further pressure on household budgets, while elevated mortgage rates will continue to weigh on housing activity and wider consumer spending.”

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