Faisal Islam: Why the UK economy is surprisingly resilient
Summary
The UK economy grew 0.7% in the three months to September 2026, its fastest quarterly growth in more than two years and above recent forecasts. The article links the surprise growth partly to investment in AI and technology, but says rising energy costs, weak housebuilding and uncertainty over the Iran conflict could weigh on the economy later in the year.Key Facts
- UK economic output rose 0.7% in the three months to September 2026.
- The growth rate was higher than the 0.1% average forecast made months earlier and the 0.3% estimate included in the latest budget forecast.
- The article says the UK was on course to be the second-fastest-growing major G7 economy, behind the United States.
- Spending on AI, technology and related data centres helped drive growth over the year.
- Private-sector business investment and productivity have looked stronger after recent revisions, according to the article.
- Consumer spending had remained resilient, but consumer confidence fell as petrol and household energy prices began to rise.
- Construction and private housebuilding remained weak.
- The article identifies the Iran conflict and its effects on energy prices and borrowing costs as major uncertainties for the outlook.
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