UK economy grows 0.7pct in third quarter on AI boost
LONDON: Britain’s economy expanded in line with expectations in the third quarter, official data showed Thursday, as spending on the AI boom helped offset the fallout from the US-Iran war.
Britain's economy expanded by 0.7% in the third quarter, according to official data released Thursday, exceeding expectations. This growth was primarily fueled by increased spending on artificial intelligence (AI) and technology, which helped offset the negative impact of the US-Iran conflict. GDP rose from a revised 0.5% expansion in the previous quarter, as reported by the Office for National Statistics (ONS).
The services sector, especially computer programming, played a crucial role in driving the economic growth throughout the year. Many businesses showing significant turnover increases were engaged in AI-related activities and cloud computing, according to the ONS. The Bank of England had recently raised its forecast for UK economic growth in 2023 and 2024, citing increased business investment linked to the demand for AI.
Following the release of these figures, the central bank also announced its first interest rate hike in over three years due to soaring energy costs, which have led to record-high diesel prices worldwide. Despite the Middle East conflict disrupting global growth, Britain demonstrated notable resilience, as stated by Finance Minister John Healey in response to the positive economic indicators.
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