UK GDP Growth Reaches 0.7% in Q3, Led by Services Sector Output

The U.K. economy expanded by 0.7% in the third quarter, matching economists' estimates and improving from 0.5% growth in the previous quarter. Year-on-year, the economy grew 1.9% in the three months ending September. This growth was primarily driven by a 0.9% increase in the services sector. The production sector saw modest growth of 0.1%, while the construction sector contracted by 0.7%. In September alone, the economy grew by 0.2% month-on-month, exceeding expectations for no change and improving from revised zero growth in August.

Officials highlighted the economic resilience amid global challenges, with U.K. Finance Minister John Healey noting that growth was the fastest in almost a decade outside the pandemic period. The British pound declined slightly against the U.S. dollar by 0.2% but remained flat against the euro. U.K. government bond yields showed little movement. These GDP figures provide evidence of steady recovery in the U.K. economy, led largely by services sector strength.

This growth matters for investors because sustained GDP expansion can influence central bank policy, currency strength, and bond yields. The resilience in services output offsets weakness in construction, affecting overall economic momentum and investment outlook. The 0.7% quarterly growth figure serves as a key indicator of the U.K.'s economic performance during this period.