UK economy unexpectedly expands 0.4% in July, official data show

Official figures show the UK economy grew by 0.4% in July, outperforming economists' forecasts of no growth.

The UK economy grew by 0.4% in July, according to official figures released on Friday, a stronger outcome than economists had expected, who had predicted no growth for the month.

The monthly expansion provides a sharper short-term picture of activity than many forecasts had suggested and will be watched closely as an indicator of economic momentum after a period of sluggish performance.

The report did not immediately break down the contribution of individual sectors to the rise, leaving questions about whether the increase was broad-based or concentrated in particular areas of the economy.

Policymakers, markets and businesses are likely to scrutinise the data for signs about the near-term path of growth and inflation, and how those might influence monetary and fiscal decisions. Economists have previously warned that single-month figures can be volatile, so analysts will be looking for confirmation in subsequent releases.

While the unexpected rise in July provides some positive news on activity, officials and commentators will weigh it alongside other indicators and longer-term trends before drawing firm conclusions about the health of the wider economy.