Pound climbs after UK growth beats expectations, powered by AI and tech boom

The British pound ticked higher after official data showed the UK economy grew 0.4% in July, a number that made forecasters look overly cautious. Economists had predicted zero growth for the month. Sterling rose roughly 0.1% to $1.352 on the release. The numbers behind the surprise July’s month-on-month GDP expansion of 0.4% wasn’t just better than the flat-line consensus. It also pushed the year-on-year growth rate to 1.6%, well above the 1.2% economists had penciled in and the strongest annual reading since February 2025. The three-month growth rate through July came in at 0.4% as well. For the first half of 2026, UK GDP expanded by 1%. That pace makes Britain the fastest-growing economy among G7 nations. The Bank of England’s forecast for the entire year of 2026 sits at just 1.1%, meaning the economy has nearly hit the full-year target with five months still to go. The services sector matched the headline figure with its own 0.4% monthly gain. AI is doing the heavy lifting IT, computer programming, and artificial intelligence-related activities were the primary engines behind July’s expansion. The Office for National Statistics specifically highlighted AI’s role in software deve...