UK GDP rises 0.4% in July, driven by AI sector growth

The UK economy recorded a modest expansion in July, with gross domestic product rising by 0.4% according to the Office for National Statistics, surpassing the 0.3% increase recorded in June and beating city economists’ forecast of zero growth. The unexpected gain has been attributed primarily to the rapid growth of artificial intelligence within the services sector, which analysts say has offset the lingering economic effects of the ongoing conflict in Iran.

The stronger-than‑expected performance provides a welcome boost to Chancellor John Healey’s fiscal agenda, reinforcing confidence in the government’s handling of post‑war economic challenges. Continued momentum in AI‑driven services is expected to play a key role in sustaining growth, while policymakers monitor external risks that could influence future output.