UK Economy Grows 0.7% in Q3 as AI Spending Offsets Iran War Energy Shock

The UK economy grew 0.7% in the third quarter, its fastest pace in two and a half years, as the rollout of artificial intelligence fuelled spending by businesses and consumers that continued to weather the energy shock caused by the Iran war. The Office for National Statistics said on Thursday that the reading was in line with the median forecast of economists surveyed by Bloomberg.

Growth accelerates from second quarter

Gross domestic product rose 0.7% in the third quarter, an acceleration from the 0.5% expansion in the second quarter. The ONS figures, reported by Tom Rees and Philip Aldrick, pointed to the strongest growth since early 2024. The third quarter figure matched expectations, suggesting the economy held up despite pressure from the energy shock linked to the Iran war.

September reading beats forecasts

GDP rose 0.2% in September alone. That was better than the flat reading predicted. The monthly gain adds to evidence that spending by businesses and consumers, supported by artificial intelligence rollout, kept activity moving in the quarter.