15 October 2026
If you are covering the latest UK GDP figures, please see the following commentary from Jonathan Raymond, investment manager at Quilter Cheviot:
"Following the positive news this week from the IMF, and a bumper print in July, the UK economy continued to eke out growth in August. While monthly GDP is volatile and subject to revisions, growth of just 0.1% was registered, down from 0.4% in July. The three-month rate remains robust and ahead of forecasts, while the year-on-year figure of 2.1% is a respectable rate of growth by western economy standards and was comfortably ahead of expectations. The broader picture therefore remains more encouraging than the relatively subdued monthly figure might suggest.
"Earlier this week, the IMF delivered a dose of good news, with the growth forecast for the UK economy this year being upped at the same time as the country was called out for an admirable deficit reduction programme. Furthermore, it seems some of the AI buildout is beginning to feed into the economy, and we would expect this to continue in the coming months as the huge amount of global capital expenditure in datacentres takes effect. While the UK isn’t necessarily leading the charge on AI like the US and China, it can still reap the economic benefits.
"That said, the economic environment for next year continues to look challenging, with growth forecasts cut as a result, while the deficit reduction requires some difficult spending decisions to be made from 2028, something the new government will not likely want to be implementing. Higher energy costs and interest rates, alongside elevated inflation, will weigh on confidence going into 2027.
"While today’s data is modestly positive, it does little to simplify the Bank of England’s task when it comes to interest rates. The Bank has a difficult balancing act between fighting inflation and avoiding choking off economic growth, and the resilience shown in the wider GDP figures gives it less reason to rush. Market eyes are now firmly trained on the Budget in less than two weeks’ time and the potential this has for pro- or anti-growth measures. Given the fiscal position remains of concern, tax rises are expected to be announced, but the scale of these remains to be seen. The government has wanted to deliver more of the positive ‘vibes’, and today’s figures provide some support for that narrative, even if the reality of the public finances means there is little room for complacency."
