Britain's economy grew faster than it has in more than two years in the third quarter of 2026, and artificial intelligence did much of the heavy lifting. The Office for National Statistics (ONS) said on Thursday that gross domestic product rose 0.7% between July and September, up from a revised 0.5% in the second quarter and in line with economists' expectations.

It was the strongest calendar-quarter growth since the first three months of 2024. On an annual basis, the economy was 1.9% larger than a year earlier, also the best reading since late 2024. The figures are a first estimate and remain subject to revision as more detailed data comes in.

Services did almost all the work

Growth came almost entirely from the services sector, which expanded 0.9% over the quarter. Within it, computer programming and consultancy surged 4.4%, its fastest growth in three years, making it the largest single driver of GDP growth across 2026, according to the ONS.

"The economy grew robustly in the third quarter almost entirely due to strong and widespread growth in the services sector," said ONS chief economist Grant Fitzner. "Within services, computer programming again increased strongly, as it has all year, registering its fastest growth in the last three years. We continue to see evidence that AI linked businesses helped to boost this sector."

The ONS added that many of the businesses reporting the largest increases in turnover were involved in activities related to artificial intelligence and cloud computing, though it cautioned that the exact impact of those activities is difficult to measure precisely.

A stronger September than expected

The quarter also ended on a firmer note than forecast. GDP rose 0.2% in September alone, after flatlining in August, where many economists had expected no growth at all. Eleven of the 14 services subsectors contributed positively to the quarter, led by administrative and support services and information and communication.

Elsewhere in the economy, production output edged up 0.1% while construction fell 0.7%. Manufacturing grew 0.9% over the three months, led by a 4.6% rise in output of computer, electronic and optical products — another sign of the technology sector's outsized role in the recovery.

Central bank lifts its forecasts

The Bank of England had already flagged the trend last week, raising its UK growth forecasts for this year and next to 1.6% and 1.3% respectively, up from 1.1% for both years in its July outlook. The central bank cited stronger business investment linked to AI-related demand, including data centres and software.

The Bank of England and Bloomberg Economics have each estimated that around a fifth of recent growth has come from investment linked to artificial intelligence. The spending boom helped offset wider pressures on the economy, including the fallout from the US-Iran war, which weighed on energy prices and global trade during the quarter.

Whether the momentum holds will depend on whether AI investment keeps flowing at its current pace — and whether it starts showing up in productivity, not just in spending. For now, though, the numbers give Britain its best growth story in two and a half years, and it is one written largely in code.