The UK economy grew by 0.4% in July, with business services leading the increase while consumer-facing activity fell, according to figures released by the Office for National Statistics on 11 September.
The monthly rise in gross domestic product followed growth of 0.3% in June and no growth in May. Production increased by 0.2% in July and construction by 0.1%.
GDP measures economic output. These figures adjust for price changes, so they describe changes in the volume of activity rather than simply higher prices.
Business services supplied the momentum
The ONS’s separate services bulletin showed that the sector expanded by 0.4% during July. Eight of its 14 subsectors grew, four contracted and two were unchanged.
Administrative and support services made the largest positive contribution, with output rising by 3.7%. Information and communication followed, growing by 2.4%, helped by a 3.5% increase in computer programming, consultancy and related activities.
The ONS said many businesses reporting the largest turnover in computer-related activities were involved in artificial intelligence and cloud computing. However, it could not quantify the exact impact of those activities.
That distinction limits what the figures can tell us about AI. Higher sales among businesses supplying the technology do not, by themselves, measure whether other companies have become more productive by using it.
A weaker month for consumer-facing businesses
Consumer-facing services fell by 0.4% in July. Retail trade excluding motor vehicles declined by 0.5%, although accommodation grew by 2.6%.
Across the broader services sector, wholesale and retail trade fell by 1.0% on the month, making the largest negative contribution to its performance.
The divergence is relevant to businesses planning for demand. An expanding national economy can still contain industries where customers are buying less. The headline growth rate is therefore a starting point for understanding trading conditions, rather than a description of every firm’s market.
The three-month picture
GDP grew by 0.4% in May to July compared with February to April. Services rose by 0.6%, while production and construction each fell by 0.5%.
Professional, scientific and technical activities were the largest positive contributor to services growth over those three months, with output up 2.1%. Information and communication increased by 2.5%.
Our earlier report on second-quarter GDP and business investment provides the preceding quarterly picture. Today’s rolling three-month comparison covers a different period, including July and excluding April.
No earlier periods were revised in this release. The ONS will reopen the full time series for revision on 15 October, incorporating its annual national accounts update and additional information.
