UK economy continues to recover in third quarter
Investment in the service industry and artificial intelligence drive economic recovery, but high energy prices and pressure to raise interest rates still pose hidden concerns
Quick Look
- UK GDP grew by 0.7% quarter-on-quarter in the third quarter, hitting the highest level since the first quarter of 2024, and the year-on-year growth rate rebounded to 1.9%.
- The economic recovery is mainly driven by the service industry and artificial intelligence-related investment, but high energy prices, interest rate hikes and weak consumption still pose hidden concerns.
- The market expects the probability of the Bank of England to continue raising interest rates in December to rise to 73%.
AI-generated summary
Why It Matters
The British economy continued its recovery trend in the third quarter, with growth strengthening and hitting its highest level since the first quarter of 2024. It withstood multiple external pressures such as geopolitical conflicts and rising energy prices, and its economic resilience exceeded market expectations.
China News Service, London, November 12 (Reporter Ouyang Kaiyu) The latest official data released by the United Kingdom shows that the British economy continued its recovery trend in the third quarter, with a stronger growth rate, hitting the highest level since the first quarter of 2024. It withstood multiple external pressures such as geopolitical conflicts and rising energy prices, and its economic resilience exceeded market expectations.
Data released by the British Office for National Statistics on the 12th stated that the British gross domestic product (GDP) increased by 0.7% in the third quarter of 2026 from the previous quarter, which was significantly faster than the 0.5% growth rate in the second quarter, and the year-on-year growth rate rebounded to 1.9%.
This round of economic recovery is mainly driven by the service industry, and artificial intelligence-related investment has become a core growth highlight. Statistics show that digital service industries such as computer programming and technology consulting have contributed important growth momentum, computer manufacturing output has increased significantly, and the upstream and downstream of the artificial intelligence industry chain have continued to exert force, driving the overall steady expansion of the British service industry.
As economic data continues to strengthen, the pressure on the Bank of England's monetary policy has further increased. According to market estimates, the probability of the Bank of England continuing to raise interest rates in December has risen to 73%. The industry generally expects to raise interest rates again within the year. There is still room for multiple interest rate increases next year to deal with the risks of economic overheating and high inflation.
However, worries about the British economy continue to accumulate. British media said that domestic consumption and corporate investment showed weakness due to high energy prices and continued interest rate hikes that increased borrowing costs. Retail sales fell in September and consumer confidence fell. The growth rate of corporate investment in the third quarter was lower than expected, and household energy bills may rise sharply next year, and the subsequent economic recovery may slow down. (over)
What to Watch
AI outlook — possibilities, not facts
The Bank of England continues to raise interest rates in December
Likely · Within weeks
The subsequent economic recovery may slow down
Possible · Within months
Open Questions
- Will the Bank of England actually raise interest rates in December?
- The specific impact on consumption of rising household energy bills next year
- The specific scale and industry distribution of artificial intelligence-related investments
