Source: Sharecast
According to data from the Office for National Statistics, the dominant services sector drove growth in the three months to September. Output rose 0.9%, and helped offset a 0.7% slide in construction. Production output edged up 0.1%.
Chief economist Grant Fitzner said: "The economy grew robustly almost entirely due to strong and widespread growth in the services sector.
"Computer programming again increased strongly, as it has all year, registering its fastest growth in the last three years. We continue to see evidence that AI-linked businesses helped to boost the sector.
"Leasing of cars, intellectual property and property management companies also helped to boost services, alongside increases in accountancy, employment agencies and car dealerships."
Monthly GDP grew by 0.2%, compared to a downwardly revised no growth in August.
Energy costs have soared since the US launched its first strikes against Iran at the end of February, pushing the UK consumer price index up to 3.5%. In response, Bank of England - which prior to the outbreak of war had been expected to cut interest rates in 2026 - last week upped the cost of borrowing to 4%, with financial markets pricing in further rises. Consumer sentiment is also on the back foot as the cost of living mounts.
Yet despite that the economy is continuing to expand. Year-on-year, GDP rose 1.9% in the three months to September, driven by increases in consumer spending and investment. It was the highest growth in almost two years, the ONS noted.
Chancellor John Healey said the economy was showing "standout resilience"”.
However, the CBI’s deputy chief economist, Alpesh Paleja, said: "The picture is less encouraging when we dig a little deeper. Conditions are uneven across sectors, with activity more subdued. Across the UK, firms continue to face a common challenge: the high and growing cost of doing business, set against a backdrop of uneven demand conditions."
The ONS also posted data on Thursday showing the total goods and services trade deficit widened by £6.2bn to £10.4bn in the third quarter, after total imports rose by more than exports.