UK economy defies forecasts with surprise 0.4% growth in July

Welcome boost for chancellor with unexpected rise put down to rapid growth of AI in services sector outweighing Iran war fallout

The UK economy grew in July as the rapid growth of AI appeared to outweigh the economic damage from the Iran war, in a welcome boost for the John Healey before next month’s budget.

Figures from the Office for National Statistics (ONS) showed a surprise 0.4% increase in gross domestic product (GDP), compared with 0.3% growth in June. City economists had forecast zero growth.