UK economy grew 0.4% in July, beating forecasts amid global risks
UK GDP rose 0.4% in July, above expectations, helped by AI and services, but analysts warn of oil and borrowing cost pressures.
The Full Story
A plain summary built from the channels that reported this story.
Official figures released on Friday showed the UK economy expanded by 0.4% in July, comfortably beating forecasts. Economists had expected no growth at all, or even a small contraction, making the positive number a welcome surprise for the new government.
The Office for National Statistics said the increase followed growth of 0.3% in June, and was driven by a strong performance from businesses involved in artificial intelligence and related technologies. Consumer spending, boosted by warm weather and the World Cup, also helped lift the services sector. However, construction and manufacturing slowed during the month.
Chancellor John Healey said the figures showed the economy was demonstrating "welcome resilience" despite serious global uncertainty. He pointed to the UK having the fastest growth among G7 economies in the first half of the year, but admitted the picture remained fragile. "The conflict in the Middle East does have impacts here at home, from the cost of the weekly family shop to the cost of government borrowing," he said.
Transport Secretary Heidi Alexander echoed that caution, saying ministers were not "in any way complacent" about economic growth. She noted the Prime Minister had already announced measures like a 20% business rates cut for music venues to help the high street.
Despite the upbeat data, economists warned of significant headwinds. Oil prices spiked overnight after Iran closed the Strait of Hormuz during its conflict with the United States, and UK government borrowing costs have risen sharply, reaching levels not seen in decades. Analysts said the growth in July should be kept in perspective, with the global situation likely to put the UK economy under severe pressure in the months ahead.
On screen
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Key Claims
Claims reported during this story's coverage, mapped by channel. Ordered by how many channels carried each claim.
| Claim | Channel 5 | BBC One | Channel 4 | ITV | Sky News |
|---|---|---|---|---|---|
| The Office for National Statistics attributed part of the growth to AI-related businesses. | · | ||||
| The UK economy grew by 0.4% in July, after 0.3% growth in June. | · | ||||
| Hospitality was boosted by warm weather and the World Cup, while construction and manufacturing slowed. | · | · | · | ||
| Sharp rises in oil prices were reported, which are expected to push fuel prices up further. | · | · | · | · | |
| UK government borrowing costs rose sharply to levels not seen for decades. | · | · | · | · |
Channel Perspectives
What each channel focused on, with key quotes.
Sky News led with the surprise nature of the growth, stressing it beat expectations, and gave prominent airtime to both the Chancellor and Transport Secretary. It framed the growth as welcome but fragile, linking it directly to global uncertainty and government borrowing costs.
- “The UK economy grew faster than expected in July. Despite experts predicting that there would be no growth to be recorded that month, the economy expanded by 0.4%.”
- “The Chancellor describes this growth as fragile and with good reason, because there are major economic headwinds in the wider economy.”
- “We are shifting power to local communities to generate growth in more places and backing business to succeed with more investment, innovation and jobs.”
Channel 4 gave the story a brief, factual treatment, highlighting the AI contribution and the Chancellor's response. It did not explore the broader economic context or the fragility warnings in any depth, instead moving quickly to other news items.
- “A strong performance by businesses involved with artificial intelligence has helped to boost the UK economy which grew faster than expected in July.”
- “Figures from the Office for National Statistics showed that GDP went up by 0.4% at a time when economists had predicted zero growth.”
- “The Chancellor John Healey said the economy was showing a welcome resilience.”
ITV1 focused on the unexpected nature of the growth, calling it a 'surprise uplift' for the Chancellor. It highlighted the role of services, AI, and also manufacturing, water supply, and construction, giving a slightly broader sectoral breakdown than some others.
- “The UK economy unexpectedly grew by naught point four percent in July following a boost from the services industry and businesses increasing their use of artificial intelligence.”
- “It marks a surprise uplift for the Chancellor John Healey given the economists were not expecting to see any growth in July.”
5 News delivered a very concise, straightforward summary, attributing the growth to construction and services and noting the AI effect. It did not include any political reaction or forward-looking analysis, and quickly moved on to other stories.
- “Contrary to forecasts, the UK economy grew by 0.4% in July.”
- “The Office for National Statistics put that down to growth in construction and services.”
- “Experts say the increase was in part helped by businesses using AI.”
BBC ONE West provided the most analytical coverage, placing the growth in the context of global risks. It repeatedly emphasised the fragility, the spike in oil prices, and rising borrowing costs, and quoted the Chancellor's 'resilience' line while also featuring expert commentary warning against overconfidence.
- “New figures show the economy grew by naught point four percent in July despite experts forecasting no growth at all.”
- “The Chancellor John Healey has said the economy is showing signs of resilience despite the climate of global volatility.”
- “Economists are warning that while the economy has proved resilient so far this year, there may be problems ahead and that challenges still exist that we shouldn't get carried away right now.”
Broadcast Timeline
News broadcasts tracked for this story, in time order.