UK Economy Grows 0.7% In Third Quarter, ONS First Estimate Shows

The UK economy grew by an estimated 0.7% in the three months to September 2026, up from 0.5% in the previous quarter, the Office for National Statistics (ONS) said in its first quarterly estimate published on 12th November 2026, a release listed in our European market week ahead.

Real gross domestic product (GDP), a measure of economic output adjusted for price changes, was 1.9% higher than in the same quarter a year earlier. Output per person rose by 0.7% over the quarter and by 1.7% over the year.

Services led the expansion, growing by 0.9%. ONS said business-facing services were the main driver. These grew by 1.0%, compared with 0.5% growth in services aimed at consumers. Administrative and support services, information and communication, and professional, scientific and technical activities made the largest positive contributions to services growth.

Production output, covering manufacturing, mining, energy and water and waste services, increased by 0.1%. Manufacturing growth was partly offset by declines in the other production industries. Construction fell by 0.7%. New construction work declined by 1.6%, with private housing the largest drag, while repair and maintenance increased by 0.5%.

Household spending rose by 0.6% over the quarter. Business investment increased by 0.4%, leaving it 3.0% above its level a year earlier, according to the quarterly bulletin.

The separate monthly GDP estimate, also released on 12th November, showed output grew by 0.2% in September. August was revised down to no growth from the previously reported 0.1% increase. July's growth remained at 0.4%.

Growth And Inflation Pressures

In its policy announcement published on 5th November, the Bank of England said its Monetary Policy Committee had voted eight to one at the meeting ending on 4th November to raise Bank Rate, its policy interest rate, by 0.25 percentage points to 4%. The remaining member favoured a larger increase to 4.25%.

The Bank put September consumer price inflation at 3.5% and forecast a rate of about 5% in the second quarter of 2027. It said rising energy prices were creating sufficient inflationary pressure to warrant the rate increase. Recent economic data had generally exceeded the Bank's expectations, which it said also supported a small interest rate increase.

That assessment preceded the latest GDP release. The Bank's minutes said policymakers judged growth was likely to slow somewhat in the coming quarters, with the outlook depending on how households and businesses responded to higher energy costs and tighter financial conditions, including higher borrowing rates.

The GDP figures remain early estimates and can be revised as more information becomes available. ONS lists 22nd December 2026 as the next release date for its quarterly estimate.