UK GDP rose 0.4% in July, beating a forecast of no growth
The ONS said Friday, September 11, 2026, that UK real GDP rose 0.4% in July and was 1.6% higher than a year earlier, versus forecasts of 0% and 1.2%.
The UK economy grew across services, production and construction in July, and Reuters said the 1.6% year-on-year rise was the fastest annual pace since February 2025, after a monthly gain of 0.4% against a forecast of no growth.
Bank of America still expects a 6-3 vote to hold Bank Rate at 3.75% on Thursday, September 17. What moved, according to the Guardian's live coverage, is the path beyond that checkpoint: one quarter-point rise now priced by November, and four by July 2027, against three at the start of the week. Susannah Streeter, chief investment strategist at Wealth Club, said a rise this year is "a touch more likely."
The Office for National Statistics put the monthly rise at 0.4%, after 0.3% in June and no growth in May. Services rose 0.4%, production 0.2% and construction 0.1%. Over the three months to July, real GDP was up 0.4% from the prior three months: services rose 0.6%, while production and construction each fell 0.5%. Liz McKeown, the ONS director of economic statistics, said computer programming made the largest contribution in July.
Investing.com had sterling at $1.3524, up 0.09%, as of 3:23 a.m. Eastern. ING said the pound is tracking Treasuries rather than UK fundamentals into the US CPI print.
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The FTSE 100 was at 10,672 as of 7:39 a.m. Eastern, up 0.59%.
The iShares MSCI United Kingdom ETF EWU, a dollar-listed fund of UK large-caps, last closed Thursday at $47.53, down 0.63%. Computer programming was July's largest single contributor; financial companies are 26% of the fund and technology is 0.72%, with HSBC, Shell and AstraZeneca at the top. The activity that lifted UK output is barely in the basket. What EWU trades on is banks and rates. The full GDP series reopens on the October 15 release, with Blue Book revisions.
Frequently asked
Does this mean the Bank of England will raise rates next week?
No: Bank of America still expects a 6-3 vote to hold Bank Rate at 3.75%, but markets now price a quarter-point rise by November.
What drove the July growth?
Services led with a 0.4% rise, and the ONS said computer programming made the largest single contribution.
Why doesn't the UK ETF reflect the strongest part of the economy?
Financial companies make up 26% of the iShares MSCI United Kingdom ETF against 0.72% in technology, so it trades on banks and rates rather than computer programming.
Why is the pound not moving much on the data?
ING said sterling is tracking Treasuries rather than UK fundamentals ahead of the US CPI print.