Three numbers sum up how well the Bank of England saw Britain's third quarter. In July its forecasters expected growth of 0.1 per cent. In November they expected 0.7 per cent. A model built on business surveys, which the Bank's staff also watch, pointed to 0.2 per cent.
The UK economy grew 0.7 per cent in July to September 2026, and was 1.9 per cent larger than a year earlier, the Office for National Statistics said on 12 November. That matches the Bank of England's November forecast exactly. Services grew 0.9 per cent, while construction shrank 0.7 per cent.
What did the statisticians publish?
A strong quarter led by services, with investment and trade both up. Real GDP per head also rose 0.7 per cent. In cash terms, before adjusting for prices, the economy grew 1.4 per cent in the quarter and 4.3 per cent on the year.
Within services, the ONS pointed to one industry. "This industry has been the largest driver of GDP growth across 2026," the bulletin says of information and communication. Production edged up 0.1 per cent. On the spending side, households increased consumption by 0.6 per cent, government by 0.6 per cent and gross fixed capital formation by 1.7 per cent. Exports rose 1.6 per cent and imports 1.8 per cent, and inventories fell by about £2.0 billion in real terms.
The monthly path was uneven. GDP grew 0.4 per cent in July, was flat in August, revised down from 0.1 per cent, and grew 0.2 per cent in September.
How did the Bank's forecasts compare?
The headline was exactly right. The pieces were not. The Bank's November Monetary Policy Report, published on 5 November, said growth "is expected to have picked up further to 0.7% in Q3", and called that "much stronger than the July projection." It also expected households to spend more slowly and businesses to invest more quickly than the ONS has now recorded.
| Measure | Bank July projection | Bank survey indicator | Bank November projection | ONS first estimate | Gap to November projection |
|---|---|---|---|---|---|
| GDP | 0.1% | 0.2% | 0.7% | 0.7% | 0.0 points |
| Household consumption | not given | not given | 0.4% | 0.6% | +0.2 points |
| Business investment | not given | not given | about 1% | 0.4% | about -0.6 points |
The survey indicator is the most interesting miss. The Bank describes it as a model that combines its agents' reports, the British Chambers of Commerce, the CBI, the Lloyds Business Barometer and S&P Global surveys into a reading of momentum. It said 0.2 per cent. The Bank's staff chose to look past it, citing official data that showed 0.7 per cent growth in the three months to August, of which business-to-business services contributed 0.6 points. That judgement was borne out.
Business investment is the line that moved least as expected. The Bank had projected a rise of around 1 per cent, on the back of what it called the fastest two-quarter growth since 2022, and partly on demand related to artificial intelligence. The ONS has it at 0.4 per cent, though total fixed investment, including government and housing, rose 1.7 per cent.
How fast has Britain grown this year?
At about 2.4 per cent a year so far, on our arithmetic, roughly three times last year's pace. By our calculation from the ONS quarterly series, the economy grew 0.6, 0.5 and 0.7 per cent in the first three quarters of 2026, a cumulative 1.8 per cent, or about 2.4 per cent at an annual rate. Across the four quarters of 2025 it grew 0.6, 0.0, 0.2 and 0.0 per cent, about 0.8 per cent in all. The 0.7 per cent matches the first quarter of 2024 as the strongest quarter in the series since then.
| Quarter | Growth on previous quarter |
|---|---|
| 2025 Q1 | 0.6% |
| 2025 Q2 | 0.0% |
| 2025 Q3 | 0.2% |
| 2025 Q4 | 0.0% |
| 2026 Q1 | 0.6% |
| 2026 Q2 | 0.5% |
| 2026 Q3 | 0.7% |
That pace came while inflation climbed. Consumer prices rose 3.5 per cent in the year to September, up from 2.6 per cent in June, and the Bank expects inflation of around 5 per cent by the middle of 2027 as energy costs feed through. On 5 November its Monetary Policy Committee voted 8 to 1 to raise Bank Rate to 4 per cent, with one member wanting 4.25 per cent.
The comparison with the continent is stark. The euro area grew 0.4 per cent in the third quarter on its own flash estimate.
Will the 0.7 per cent last?
The first estimate can move. The ONS says the mean absolute revision between a first estimate and its final version is 0.27 percentage points, so a revision of typical size in either direction would leave the quarter at about 0.4 or 1.0 per cent. And the Bank does not expect the pace to hold: it projects that growth will slow in the fourth quarter and in 2027, with household consumption growth easing to 0.2 per cent as real incomes fall.
Two dates come next. On 17 November the ONS publishes its first quarterly productivity estimates under a new method, after revisions to the annual figures up to 2024 that the Bank says suggest productivity growth has been materially stronger than previously thought. On 22 December it publishes the second estimate of this quarter, which will show whether 0.7 per cent survives.
The third-quarter GDP, sector, expenditure and per-head figures, the monthly figures, the quotation on information and communication, the average revision and the next release date are from the Office for National Statistics' GDP first quarterly estimate for July to September 2026, published on 12 November 2026. Earlier quarterly growth rates are from the ONS series IHYQ as published on 30 September 2026. The Bank of England's projections, its July projection, its survey-based indicator, its rate decision and inflation outlook, and the 17 November productivity release are from its November 2026 Monetary Policy Report, published on 5 November. The cumulative and annualised growth rates and the forecast comparisons are this publication's arithmetic. The analysis is our own.
Topics worldUnited KingdomGDPBank of Englandinterest ratesconsumer spending
