UK economy surprisingly grows in July on AI boost

Britain's economy experienced an unexpected growth in July, according to official data released on Friday, with the artificial intelligence sector playing a key role in the expansion. The Office for National Statistics revealed that Gross Domestic Product (GDP) increased by 0.4% in the month, following a 0.3% growth in June. Analysts had forecast zero growth for July. The data also showed a 0.4% increase in GDP output for the three months leading up to the end of July.

The growth was largely driven by the services sector, with computer programming emerging as the largest contributor. This growth in the AI sector is part of a consistent upward trend throughout the year, with businesses involved in artificial intelligence and related technologies boosting this sector, according to Liz McKeown, director of economic statistics at the ONS.

However, within services, there were declines in both production and construction during the three months ending in July. The unexpected growth in the UK economy provides a boost to Prime Minister Andy Burnham and Finance Minister John Healey as they prepare for the Labour government's upcoming budget update.