UK economy grows 0.7% in third quarter as AI demand lifts output

The UK economy grew 0.7% in the July–September period, up from a revised 0.5% in the second quarter, the Office for National Statistics (ONS) said on Thursday.GDP was 1.9% higher than a year earlier. It grew 0.2% in September after flatlining in August.Services output rose 0.9% and was the main driver of growth. Computer programming, consultancy and related activities grew 4.4%, helping lift output in the wider information and communication sector by 2.1%.The ONS said computer programming, consultancy and related activities had been “the largest driver of GDP growth across 2026, with evidence that many of the businesses reporting the largest increases in turnover are involved in activities related to artificial intelligence and cloud computing." However, ONS said it was difficult to measure their exact impact.Sarah Coles, head of personal finance at AJ Bell, said: “Given the global backdrop, the rising cost of living, and the fact we were heading for the uncertainty of the Budget, growth held up well in the third quarter. And AI continued to do a significant portion of the heavy lifting.”While investors worry that heavy spending on AI may fail to generate lasting profits, Coles said its gradual adoption already appears to be helping businesses in areas such as administrative and support services in the UK.Production output edged up 0.1%, while construction output fell 0.7%.…