British economy grows despite energy bottleneck

The UK economy grew by 0.7 percent in the third quarter, in line with expectations, with the impact of artificial intelligence spending, despite energy costs and supply disruptions fueled by the wars in Iran and Ukraine.

According to Office for National Statistics (ONS) data, gross domestic product gained momentum compared to the previous quarter in the period covering July, August and September.

The country's economy expanded by 0.5 percent in the second quarter between April and June.

The announced third quarter data was in line with market expectations and was the fastest quarterly growth rate recorded since the first three months of 2024.

The main driver of economic growth was the vitality in the services sector, especially computer programming activities, which supported economic output throughout the year.

"Many of the businesses reporting the biggest increases in turnover are involved in activities linked to artificial intelligence and cloud computing," the ONS said in its statement on the sources of growth. made his assessment.

Looking at the monthly course of the data, the economy grew by 0.4 percent in July, then stagnated in August, and returned to 0.2 percent expansion in September.

Research firm Capital Economics UK Deputy Chief Economist Ruth Gregory told the French AFP agency that growth was unusually concentrated in artificial intelligence-related sectors.

Commenting on current indicators, Gregory said, "The latest monthly data show that the economy entered the fourth quarter with a higher momentum than we expected." he said.

The Bank of England last week also raised its growth forecasts for this year and next, citing the strength in business investments linked to artificial intelligence demand.

The Central Bank announced these predictions at the meeting where it increased the policy rate for the first time in more than three years due to rising energy costs pushing up global inflation.

Ukraine's attacks on Russian refineries and the disruptions in the Gulf energy supply caused by the war between the USA and Iran have pushed diesel prices to record levels around the world.

Minister of Finance John Healey, in his statement regarding the growth data, stated that the Iran war hit growth around the world, but the UK showed significant resilience.