UK economy grows 0.7% in the third quarter, its fastest for more than two years
Services and business investment drove growth between July and September, while construction shrank. Monthly GDP rose 0.2% in September after a flat August.
By Daily Oracles News Team2 min read
Growth picked up to 0.7% between July and September from 0.5% in the second quarter, the first estimate from the Office for National Statistics (ONS) showed on Thursday. It is the fastest quarterly rate for more than two years, and output was 1.9% higher than in the same quarter of 2025.
The figure matched the 0.7% the Bank of England had pencilled in for the quarter in its November Monetary Policy Report, as our preview of the release noted. It was also in line with economists' expectations in a Reuters poll.
Where the growth came from
Services, the largest part of the economy, grew 0.9%. Business-facing services rose 1.0% and consumer-facing services 0.5%. Information and communication grew 2.1%, led by a 4.4% rise in computer programming and consultancy, which the ONS said has been the largest driver of growth this year. Many of the businesses reporting the biggest increases in turnover are involved in AI and cloud computing, the ONS said, though it could not put a precise figure on their contribution.
Production edged up 0.1%, with manufacturing up 0.9% and mining and quarrying down 2.2%. Construction fell 0.7%. New work dropped 1.6% and private housing new work 4.7%, and only repair and maintenance grew.
On the spending side, households and government each increased consumption by 0.6%. Gross fixed capital formation rose 1.7%, and the separate provisional figures for business investment showed a 0.4% rise on the quarter and a 3.0% increase on a year earlier. The ONS warned that early business investment estimates can be revised up, because large capital spending is often reported late. Export volumes rose 1.6% and imports 1.8%.
Real GDP per head grew 0.7% in the quarter and 1.7% over the year.
September on its own
Monthly GDP rose 0.2% in September, against forecasts of no growth. August was revised down from 0.1% growth to zero, while July's 0.4% was left unchanged. Construction output rose 0.8% in September, with new infrastructure work the largest contributor.
Car production helped manufacturing. The ONS pointed to industry figures showing UK vehicle output up 36.3% on September 2025, when a cyber-attack had stopped production at a large car maker.
What comes next
In its November report, the Bank of England expects the economy to slow in the final quarter and into 2027.
Labour market figures follow on Tuesday 17 November and October's inflation figures on Wednesday 18 November. The next monthly GDP estimate, for October, is due on 11 December, and a revised estimate of the third quarter on 22 December.
