AI helped the UK defy expectations – but will Britain’s resilience fizzle out?
Summary
The UK economy grew 0.7% in the third quarter, its fastest expansion in two and a half years, with IT and professional services accounting for about half of the increase. Analysts estimate AI-related spending added 0.3% to 0.4% to GDP growth this year, but uncertainty over technology investment, higher household energy bills and inflation could weaken growth.Key Facts
- The UK was the second-fastest-growing G7 economy this year, according to the article.
- IT and professional services together contributed about half of the rise in economic activity.
- Deutsche Bank estimates that AI-related spending added about 0.3% to 0.4% to GDP growth this year.
- Household consumption rose 1.6% so far this year, supported in part by summer spending.
- Average annual household gas and electricity bills are expected to rise above £2,000 in January.
- Retail sales and consumer discretionary spending fell in September, while real wage growth cooled.
- City investors expect at least two more quarter-point Bank of England interest rate increases, bringing the rate to 4.5% before the end of next year.
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