The UK economy grew by 0.7% between July and September 2026 compared with the previous three months, according to the first estimate published by the Office for National Statistics. GDP was also 1.9% higher than in the same quarter a year ago. Services drove the growth, rising 0.9% over the quarter. Production grew 0.1%, while construction fell by 0.7%.
Experts react to growth figures
Experts have been reacting in the days since, with one telling Newspage that, despite the positive figures, interest rates could stay "higher for longer".
Samuel Mather-Holgate, managing director and Independent Financial Adviser at Swindon-based Mather and Murray Financial, said: "These figures suggest Labour's focus on stability might be starting to pay off. One quarter does not prove the strategy, but 0.7% growth is an encouraging sign."
"The Budget should build on that with predictable taxes and a clear plan that gives businesses confidence to invest and hire. For households, growth only becomes real when wages stretch further and jobs feel more secure."
'Higher rates for longer'
Riz Malik, Independent Financial Adviser at Southend-on-Sea-based R3 Wealth, said: "Following the recent base rate rise, if the economy grows and unemployment doesn't rise there is little reason for the Bank of England to consider rate cuts until inflation is firmly under control. Even if we see a resolution to the conflict in the Middle East we may see higher rates for longer."
Stephen Perkins, mortgage broker and managing director at Norwich-based Yellow Brick Mortgages, said: "Growth of 0.7% is encouraging and certainly better than the stagnation many households and businesses have become used to, but one strong quarter does not suddenly make people feel wealthier. Mortgage costs, energy bills and wider household expenses are still doing most of the talking at kitchen-table level."
"For borrowers, stronger growth is a mixed blessing. A healthier economy should support jobs and confidence, but if growth remains resilient while inflation is still elevated, the Bank of England has less reason to rush into cutting rates. For businesses, the most important thing now is whether this growth proves sustainable rather than being followed by another stop-start period."
Mixed bag for construction
Scott Gallacher, director at Leicester-based Rowley Turton, said: "It's great to see some good numbers coming through on growth. It's essential for the UK's economic health and tax revenues and the Government's own growth agenda. We might finally see an end to a seemingly ever-increasing tax and Government debt burden."
"However, it's still somewhat of a mixed bag, with the decline in construction being a major concern. These are 'real' jobs, and it makes the Government's promise of 1.5 million new homes almost certain to fail."
Philly Ponniah, Chartered Wealth Manager and financial coach at Philly Financial, said: "The economy might be growing, but that doesn't mean households are suddenly feeling richer. GDP is a measure of economic activity, not how much money people have left after paying their bills. For families facing higher mortgage payments, food and energy costs, these figures may feel a world away from everyday life."
Harry Goodliffe, director of Winchester-based HTG Mortgages, said: "The economy grew 0.7% and the one part of it going backwards is the part that builds houses. Construction fell 0.7% in the same three months, and there's no surprise why. Builders don't start homes that buyers can't get a mortgage on."
"Growth won't help either. A services sector growing at 0.9% gives the Bank of England every excuse to keep rates where they are. Barratt Redrow and Berkeley have both pulled back on buying land, and land not bought today is homes not built years from now. This Government promised to get Britain building. I expect construction to keep shrinking well into next year."
