Latest UK growth figures provide further evidence of a two-speed economy
Growth Commission member Douglas McWilliams has issued the following response to the GDP figures for the three months to August 2026 that have been issued this morning:
“The last GDP data to be released before the Budget provides further evidence of a two-speed economy. Growth has accelerated slightly in the most recent three months from 0.5% in the three months to July to 0.7% in the three months to August, with the driving force behind the growth coming from the tech sector.
“Information and communications (Section J of the economy) directly contributed 0.3 percentage points to the 0.7% GDP growth in the most recent three months. Computer programming and associated consultancy rose by a staggering 5 percentage points in the recent three-month period, driven by a record $6.4 billion third quarter venture capital investment, of which a substantial proportion is in AI.
“Industry meanwhile remains weak; and construction is in deep trouble with a further 1% decline in the most recent three months. Moreover, restaurants and pubs are also doing badly, with output down 1.5% in the most recent three months.
“The new data supports the reasoning behind the proposals in the recent Growth Budget put forward by The Growth Commission in which we set out how to spread the recovery and to lock in the tech sector growth. Our Growth Budget set out tax proposals; reforms to health and safety laws and planning regulations to boost the construction sector; how to help manufacturing through lower energy costs; and how to sustain tech sector growth by encouraging venture capital and inward investment – as well as staying out of the EU regulatory zone. The tech sector and its contribution to growth – as much as half in the recent period – would be at risk if the UK rejoined the EU Single Market or became subject to its regulations.
“The Chancellor ought to incorporate The Growth Commission’s Growth Budget proposals in his Budget on 28th October to ensure that the tech growth doesn’t dry up while allowing the growth to spread to other parts of the economy.”
