AI boosted growth, with heatwave and football also a factor

England’s sensational run to the third-fouth playoff in the Men’s football world cup, and the heatwave, both affected the UK economy in July, the ONS says.

But computer programming was a major factor behind July’s growth, as the AI boom pushed up activity.

Here’s ONS director of economic statistics Liz McKeown explaining why the economy grew by 0.4% in July:

“Growth remained relatively robust in the latest three months, as ongoing strength in the services sector was only partially offset by falls in both production and construction.

“Within services, computer programming was the largest contributor, continuing the strong growth seen throughout the year, with evidence that businesses involved with AI and related technologies helped to boost this sector.

“Continuing recent trends, research and development and rental and leasing also helped drive growth, while wholesaling saw a notable fall.

“Looking at the latest month, services also drove growth in July, with computer programming again making the largest contribution. Separately, as in June, some businesses reported that the warm weather and FIFA World Cup had affected their activity, although effects differed across industries, benefitting some businesses while creating challenges for others.”

Updated

On an annual basis, real UK GDP is estimated to have grown by 1.3% in the three months to July 2026 compared with the same three months a year ago, the ONS reports.

That’s relatively slow by historic standards, but consistent with the UK’s weak growth over the last gew years.

Compared to the same month a year ago, GDP is estimated to be 1.6% higher in July 2026.

Chart: UK GDP kept rising in July

UK GDP REPORT RELEASED

Newsflash: The last month of Sir Keir Starmer’s premiership ended with stronger than forecast growth.

New data from the Office for National Statistics shows that the UK economy expanded by 0.4% in July alone, smashing forecasts that the economy would stagnate during the month.

That follows growth of 0.3% in June 2026 and no growth in May 2026.

The ONS says the growth in July was because of rises of 0.4% in services, of 0.2% in production and of 0.1% in construction.

More to follow…

Oil’s dipping this morning, with Brent crude down 2.1% to $105.32 a barrel.

That follows news that Gulf foreign ministers plan to meet their Iranian counterpart in a push by Oman and Iran for a deal to temporarily manage shipping through the Strait of Hormuz….

Introduction: It's GDP Day

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

We’re about to learn how the UK economy fared in July, during the summer heatwave.

July’s GDP report is expected at 7am. And economists are not optimistic there was much growth during the month – the concensus forecast is that GDP will be unchanged compared to June,

Over the last three months, that would slow growth to 0.3%, down from 0.4% in April-June, highighting the economic challenges facing chancellor John Healey.

A poor GDP report could add to jitters in the markets, where government bonds suffered another sell-off yesterday.

This sell-off pushed the yield, or interest rate, on 10-year UK government bonds to over 5.37% – the highest cost of borrowing since 2007.

Related: Global bond sell-off resumes as surging oil prices stoke fears about inflation

The agenda

  • 7am BST: UK GDP report for July

  • 7am BST: UK trade report for July

  • 1.30pm BST: US CPI inflation report

  • 3pm BST: University of Michigan’s US consumer confidence report