AI helped UK defy expectations – but will economy’s resilience fizzle out?

The UK economy grew 0.7% in the third quarter—the fastest pace in over two years—defying forecasts of near-zero growth, with artificial intelligence investment in datacentres and IT services driving roughly half the expansion. However, analysts warn the resilience may be short-lived: uncertainty around AI stock valuations and a projected 25% jump in energy bills this January threaten to dampen household spending and technology investment, the economy's twin engines. Chancellor John Healey is attempting to sustain momentum by courting AI-related business investment, but real wage growth is slowing and early September data showed declines in retail sales.