The UK economy grew by 0.4% in July, following a 0.3% rise in June, according to the Office for National Statistics (ONS). The increase was a surprise, as economists had forecast no growth for the month.
The services sector was the main driver, with output up 4%. Computer programming made the largest contribution, with many businesses reporting high turnover linked to AI and cloud computing.
Production output rose 0.2%, helped by manufacturing and water supply, while construction increased 0.1% thanks to housing repair and maintenance.
The heatwaves had less impact on pubs and restaurants in July than in June, when record hot weather and the start of the Fifa World Cup boosted activity.
ONS director of economics statistics Liz McKeown said: "some businesses reported that the warm weather and Fifa World Cup had affected their activity, although effects differed across industries, benefiting some businesses while creating challenges for others".
Chancellor John Healey said: "Britain's economy is demonstrating a welcome resilience, despite serious global uncertainty." He referred to the Iran war, saying it "does have impacts here at home – from the cost of the weekly family shop to the cost of Government borrowing". Government long-term borrowing costs have risen to their highest levels in 28 years.
He added: "We are shifting power to local communities to generate growth in more places and backing business to succeed with more investment, innovation and jobs. This is the route to raising living standards and delivering good growth in every postcode."
Susannah Streeter, chief investment strategist at Wealth Club, said AI appeared to be providing a "bounce" for the UK economy, adding: "It's a sign that the AI spending boom is starting to feed through into the wider economy, as businesses invest in the computing power, software and expertise needed to put the technology to work."
Yael Selfin, chief economist for KPMG, said: "Despite strong activity in July, the headline growth figure masks a weaker picture for households."
