UK economy beats forecasts with 0.4% monthly growth in July

The UK economy grew in July, helped by gains across services, production and construction, figures from the Office for National Statistics showed on Friday.

Gross domestic product increased 0.4% in July from June, accelerating from growth of 0.3% in June and no growth in May.

The reading comfortably beat the FXStreet-cited consensus forecast for no growth.

Compared with July 2025, GDP was 1.6% higher.

In the three months to July, the economy grew 0.4% compared with the three months to April, matching growth in the three months to June. This marked the eighth consecutive three-month period of expansion.

Services output, the largest part of the UK economy, rose 0.4% in July and increased 0.6% in the three months to July.

Production output increased 0.2% on the month, rebounding from declines of 0.2% in June and 0.7% in May.

Manufacturing output rose 0.9% in July, with increases in eight of 13 subsectors. The largest contributions came from computer, electronic and optical products, up 5.2%, basic pharmaceutical products, up 3.4%, and basic metals, up 2.8%.

However, mining and quarrying output fell 4.4% in July, and electricity and gas output declined 1.5%.

Over the three months to July, production output fell 0.5%, its first three-month-on-three-month decline since November 2025. Manufacturing rose 0.5% over the period, but declines in water supply and sewerage, electricity and gas, and mining and quarrying outweighed it.

Construction output edged 0.1% higher in July, following declines of 0.1% in June and 0.8% in May.

The monthly rise was driven by a 0.8% increase in repair and maintenance, while new work fell 0.4%. Private housing repair and maintenance rose 1.7%, while private housing new work fell 4.9%.

Construction output fell 0.5% in the three months to July, with both new work and repair and maintenance declining.

Separately, UK goods imports increased by £1.3 billion, or 2.4%, in July, while goods exports rose by £900 million, or 2.8%, the ONS said.

The rise in imports reflected a £1.7 billion increase in purchases from non-EU countries, partly offset by a £400 million decline in imports from the EU.

Exports to the EU rose by £800 million, while exports to non-EU countries increased by £100 million.

The UK's total trade deficit in goods and services narrowed by £1.1 billion to £9.0 billion in the three months to July from the three months to April.

The goods trade deficit narrowed by £400 million to £61.6 billion, while the services surplus widened by £700 million to £52.6 billion.

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