Deutsche Bank economists Sanjay Raja and Maui Brennan expect United Kingdom (UK) Gross Domestic Product (GDP) to have slipped slightly in July after strong growth earlier in 2026. They forecast a modest monthly contraction led by services and production, with construction only marginally higher. The bank still projects UK GDP to expand by 1.1% in 2026 and 1.3% in 2027, with momentum supported by productivity and AI-related investment.<\/p>\n
UK growth eases but stays resilient<\/p>\n
“UK GDP likely dropped a touch in July after a hot start to the year. This isn\u2019t the start of a protracted fall in activity, however. Recent survey data have remained positive.”<\/p>\n
“Economic momentum remains steady. Instead, we believe the July drop reflects a small course correction for an economy running at an unsustainable 2% annualised pace of growth.”<\/p>\n
“What do we expect? We expect a small 0.1% m-o-m contraction in July, led by falls in services (-0.1% m-o-m) and production (-0.3% m-o-m).”<\/p>\n
“Looking ahead, we expect momentum to remain range-bound. Some catch down from the energy shock still feels likely.”<\/p>\n
“We continue to see GDP expanding by 1.1% this year, followed by 1.3% next year. Signs of further momentum coming from higher productivity and delivery of AI investment, we think can keep GDP<\/a> rising further and faster in the coming years.”<\/p>\n