UK economy grew faster than expected in July

JUST IN: UK economy grew 0.4% in July, beating economist forecasts of no growth, boosted by a strong services sector and AI-related businesses.

The UK economy just grew 0.4% in July, and nobody saw it coming.

Economists had pencilled in exactly zero. Instead the Office for National Statistics says services carried the month, with computer programming out in front, and businesses working on AI and related tech gave the numbers a lift not just in July but through May and June too. So Britain's growth story right now is partly being written by code.

There's also a more human explanation in there. The ONS says warm weather and the football World Cup shifted spending around, helping some businesses and squeezing others. You can picture it, sunshine, screens in every pub, and card machines like this one doing overtime.

The caution comes from the City. Quilter Cheviot's Richard Carter says growth like this may not last, activity could stall ahead of the Budget, and the Middle East war leaves the UK badly exposed. So enjoy the 0.4% while it's warm. The Chancellor certainly will.

This is Sara White, reporting for HIT.