The UK economy delivered a stronger performance during the third quarter of 2026, with gross domestic product (GDP) expanding by 0.7%, according to the latest figures from the Office for National Statistics (ONS).
Growth accelerated from 0.5% in the previous quarter, lifting annual UK GDP growth to 1.9% and suggesting the economy is showing greater resilience despite persistent inflationary pressures and economic uncertainty.
Services sector
The services sector provided the principal driving force, expanding by 0.9%, supported by professional services, information technology and business activities.
Computer programming and consultancy performed particularly strongly, with artificial intelligence and cloud computing helping to support activity.
However, the recovery remains uneven. Construction output contracted by 0.7%, while production managed growth of just 0.1%, highlighting continuing weakness across parts of the economy.
September 2026 GDP increased by 0.2%, following stagnation in August 2026, providing a modestly encouraging finish to the quarter.
BoE Dilemma?
For the Bank of England, stronger economic activity presents a potential dilemma. Improving growth offers reassurance, but persistent inflation could complicate decisions over future interest rate reductions.
The latest figures suggest Britain’s economy is gaining momentum, although whether that improvement can be sustained amid elevated borrowing costs and fragile consumer confidence remains uncertain.