Britain’s economy delivered a stronger-than-expected performance in July, with new figures showing GDP grew 0.4% during the month, providing a boost to businesses and the government ahead of the autumn Budget.

The latest figures from the Office for National Statistics were significantly stronger than economists’ expectations of no growth. The economy was 1.6% larger than a year earlier, its fastest annual growth rate since February 2025.

A major contributor was the services sector, particularly computer programming and businesses benefiting from increased investment linked to the artificial intelligence boom. Manufacturing also expanded, with computer and electronics production contributing to growth.

The figures provide some positive news for UK businesses after months of concerns over weak investment, high borrowing costs and rising energy prices. However, economists warn that the outlook remains uncertain as higher oil prices could increase inflation and squeeze household and business spending.

For companies, the figures underline the growing importance of AI investment, digital services and technology-led productivity in Britain's economic performance.