The ONS said the services sector drove growth in July, with output increasing by 4%

The UK economy unexpectedly grew by 0.4% in July following a boost from the services industry and businesses increasing the use of AI, official figures show.

The Office for National Statistics (ONS) released the latest gross domestic product (GDP) data, which was up from a 0.3% growth rate in June.

It marks a surprise uplift after economists were expecting the economy to show zero growth for the month.

The figures will come as welcome news to Chancellor John Healey who earlier this week insisted that the UK economy was “turning a corner”, as he prepares to deliver his first autumn Budget statement next month.

The ONS said the services sector drove growth in July, with output increasing by 4%, and computer programming making the largest contribution.

Artificial intelligence (AI) and related technology has helped to boost the sector over the past three months, according to the ONS.

Its evidence showed that across computer programming, consultancy and IT activities, many of the businesses reporting the largest turnover in July were involved in activities related to AI and cloud computing.

It comes amid a wider AI investment boom, with businesses increasingly spending on infrastructure and training to accelerate their use of the technology.

GDP growth in July was also helped by a 0.2% increase in production output, driven by growths in manufacturing and water supply, including sewerage and waste management, the ONS said.

Construction output also increased by 0.1%, helped by housing repair and maintenance work.

Meanwhile, the impact from the heatwaves on spending in pubs and restaurants was down in July compared with June, which had been helped by record hot weather and the Fifa World Cup kicking off.

ONS director of economics statistics Liz McKeown said that “some businesses reported that the warm weather and Fifa World Cup had affected their activity, although effects differed across industries, benefitting some businesses while creating challenges for others”.

Mr Healey said: “Britain’s economy is demonstrating a welcome resilience, despite serious global uncertainty.”

He referred to the Iran war which he said “does have impacts here at home – from the cost of the weekly family shop to the cost of Government borrowing”.

Government long-term borrowing costs have risen to their highest levels in 28 years in recent weeks.

“We are shifting power to local communities to generate growth in more places and backing business to succeed with more investment, innovation and jobs,” Mr Healey said.

“This is the route to raising living standards and delivering good growth in every postcode.”

Ben Jones, CBI senior lead economist, said: Stronger-than-expected growth in July suggests that the economy carried some of its first-half momentum into Q3.

“But although the economy has proved more resilient to the fallout from the Middle East conflict than initially seemed likely, the second half of the year looks a bit more challenging. Higher household energy bills are beginning to bite, while volatile energy markets and a global bond-market sell-off are adding to uncertainty and pushing up borrowing costs.

“Business surveys have become less pessimistic than earlier in the year, but the improvement remains tentative. Ahead of the Budget, firms will be looking for how the Chancellor’s vision to unlock investment, innovation and good jobs across the country translates into action to tackle the cost of doing business – essential to turning that ambition into stronger growth and improved living standards.”

Yael Selfin, chief economist for KPMG, said: “Despite strong activity in July, the headline growth figure masks a weaker picture for households.”

She pointed to the consumer-facing services, like retail and hospitality, which marked falls in July following an earlier summer boost.

“Higher energy and fuel prices are likely to place further pressure on household budgets, while elevated mortgage rates will continue to weigh on housing activity and wider consumer spending,” she said.

This could cause momentum to slow in August and September, she cautioned.

Suren Thiru, chief economist for the Institute of Chartered Accountants England and Wales (ICAEW), said Mr Healey could be left with a “Budget headache” if economic growth starts to dwindle, “as more muted growth and surging borrowing costs erode his fiscal headroom, raising the prospect of further tax rises”.

Mr Healey is set to deliver his autumn Budget for taxes and spending on October 28, at a time when household energy bills are expected to rise following the new Ofgem price cap taking effect.

The UK economy grew by 0.4 per cent in July, well above the consensus forecast for no growth, according to figures published today by the Office for National Statistics (ONS). The statistics agency said the World Cup and record hot weather had lifted activity.

The monthly rise in gross domestic product followed growth of 0.3 per cent in June, while output stalled in May, the ONS monthly GDP estimate for July showed.

The ONS said businesses, especially in the hospitality sector, reported a boost in sales from the World Cup, which reached its latter stages in July. It said the record hot weather in the month also lifted activity.

The ONS figures show the increase in July was largely driven by a 0.4 per cent rise in services output. Service industries accounted for 81 per cent of UK economic output in the final three months of 2025, according to the House of Commons Library.

Production output rose by 0.2 per cent in July and construction output increased by 0.1 per cent.

On the three-month measure preferred by the ONS, GDP grew by 0.4 per cent in the three months to July. That matched growth in the three months to June.

The ONS’s first estimate for May had shown growth of 0.1 per cent, before the figure was revised down by 0.1 percentage points in its June bulletin.

July’s figures follow a first half in which the UK was the fastest-growing economy in the G7, according to the Resolution Foundation. The think tank said on 13 August that the economy grew by 0.6 per cent in the first quarter and 0.4 per cent in the second, giving combined growth of 1 per cent.

Stephen Hunsaker, economist at the Resolution Foundation, said at the time: “Britain’s economy has slowed after a strong start to the year, but growth of 0.4 per cent in the second quarter still leaves the UK leading the pack ahead of its G7 peers.”

The think tank said growth in the first half had left the economy 0.4 per cent larger than the Office for Budget Responsibility forecast in March, but warned that the economic fallout from the Iran war may cancel out that good news. It noted that the Bank of England had downgraded its future growth outlook.

The World Cup also featured in the ONS’s June figures, published on 13 August. The agency said the tournament, which started on 11 June, was cited as a reason for an increase in turnover in June by businesses in industries such as the manufacture of alcohol, wholesale, food and beverage serving activities, publishing, television production and advertising.

In July, payments company Square reported that transactions at Britain’s pubs and bars rose 145 per cent on the day of England’s World Cup semi-final against Argentina, with late-night trade between 10pm and 2am up 97 per cent.

The ONS’s June bulletin also said some businesses across manufacturing, retail, accommodation, and amusement and recreation cited positive impacts from the hot weather. The warm weather was also cited as having a negative impact on construction and on education, where schools were closed because of the heatwave.

Provisional Met Office figures put the mean temperature for June, July and August at 16.5C, the highest in a series stretching back to 1884, making it the UK’s warmest summer on record. The Met Office said on 1 September that the figure was 1.9C above the 1991-2020 average and beat the previous record of 16.1C set in 2025.

Separate analysis by the think tank Verdant put lost UK output from repeated heatwaves at £4.4bn by the end of July, citing reduced worker productivity and equipment shutdowns.

The ONS’s next monthly GDP estimate is due on 15 October.

---

By Frank Coughlin

The second quarter of 2026 delivered one of the most remarkable earnings seasons in the post-financial-crisis era. On an adjusted basis, the S&P 500 posted index-level EPS growth north of 30%. To place this in

Shares of HDFC Bank dropped around 2% on Friday despite positive news regarding the private lender winning all seven cases filed against it in Bahrain by investors in the Credit Suisse AT-1 bonds matter.

India’s largest private lender shares dropped to a fresh 52-week low of Rs 681.90 apiece on Friday. The heavyweight stock has fallen around 4% in a week and 6% in a month, overall plunging around 31% in 2026 so far.

Bahrain court rejects claims against HDFC Bank over Credit Suisse AT1 bonds

HDFC Bank, in a statement to ET, said that the High Civil Court of Bahrain on September 9 passed favourable orders in the final two proceedings against it. Five similar cases had been rejected by the Bahrain court between July and August. This was expected to provide relief to the lender from a key legal overhang arising from allegations of mis-selling of the high-risk securities.

“All seven cases of legal proceedings against HDFC Bank in the CS AT1 bonds investment matter stand rejected by the Bahrain Court,” the bank told ET exclusively. “All allegations were rejected outright by the Court,” it added.

Also read |HDFC Bank says all seven Bahrain claims over Credit Suisse AT1 bonds rejected

The investors had alleged gross negligence, intentional misrepresentation, incorrect customer classification, non-disclosure of product features, misuse of financial leverage and violations of product-suitability principles in connection with their purchases of Credit Suisse AT1 bonds through the bank. HDFC Bank told ET that the court in Bahrain rejected the claims after investors failed to produce sufficient admissible evidence either to substantiate their claims against the lender or demonstrate that losses suffered by them were attributable to the bank.
The disputes stem from the write-down of Credit Suisse’s AT1 securities to zero during its emergency takeover by UBS in March 2023, which resulted in losses for bondholders globally. “Where required, the Bank will stand with its customers. However, the Bank is not in the business of underwriting the investments made by the customers out of their own judgement, and it will therefore defend itself rigorously against any unsubstantiated claims,” HDFC Bank said in its statement.Earlier this year, HDFC Bank terminated three senior executives, including Group Head of Branch Banking Sampath Kumar, over their alleged role in the mis-selling of Additional Tier-1 (AT1) bonds linked to Credit Suisse, sources told ET. The two other executives, Harsh Gupta (Executive Vice President, Middle East, Africa and NRI onshore business) and Payal Mandhyan, were also let go following internal findings.

Gupta and Mandhyan had been suspended in January last year after the bank initiated an internal probe into the alleged mis-selling of debt products at its Dubai branch. The investigation found that several AT1 bond investors claimed they were encouraged to move their foreign currency non-resident (FCNR) deposits from India to Bahrain.

Also read | HDFC Bank sacks 3 senior executives over Credit Suisse AT1 bond mis-selling allegations

Governance worries at HDFC Bank

HDFC Bank shares saw a sharp sell-off in March this year after its former part-time Chairman Atanu Chakraborty resigned, stating that some practices within the bank did not match his personal values and ethics. The stock lost 12% in three days after his resignation on March 18, leading to a massive share sell-off that wiped off around Rs 1.6 lakh crore from the bank’s market value in just three sessions. The private lender then took several measures to address concerns.

The shares of the private lender sharply recovered some of the losses after a strong Q1 business update, all of which, however, were wiped out after its actual quarterly results. The heavyweight stock hitting fresh record lows is dragging down major indices as well as mutual funds.

What lies ahead for HDFC Bank share price?

Recently, Jefferies’ Global Head of Equity Strategy and emerging markets bull Christopher Wood removed HDFC Bank along with PB Fintech’s PolicyBazaar from his India long-only model portfolio, replacing them with Multi Commodity Exchange of India (MCX) and Lenskart Solutions in a shift toward exchange infrastructure and retail.

Goldman Sachs initiated coverage on HDFC Bank with a ‘Buy’ call and a target price of Rs 861 apiece. Goldman Sachs noted the bank’s core-PPOP inflection driven by margins and operating leverage, along with attractive valuations. The brokerage initiated coverage at ‘Buy’ on compelling valuations, despite expecting further downside earnings revisions. Nomura and Motilal Oswal Financial Services also have ‘Buy’ calls on the shares of HDFC Bank.

Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.

Story Continues

VENICE, Italy — Elon Musk is threatening legal action against filmmaker Alex Gibney over a nearly four-hour documentary examining the billionaire’s influence across technology, business and politics, following the film’s world premiere at the Venice Film Festival this week, where it received a five-minute standing ovation.

Musk’s attorney, Alex Spiro, sent a letter to Gibney’s production company, Jigsaw Productions, on Sept. 3, putting the team on “formal legal notice” over claims made in the documentary, according to The Hollywood Reporter. The letter specifically focuses on an insinuation the film makes suggesting Musk used his Starlink satellite network to help influence the 2024 U.S. presidential election in favor of President Donald Trump.

Spiro’s letter argued that Gibney’s production failed to properly verify its claims before moving forward with the film.

“You are on notice, before release, that the insinuation is false, that the material refuting it is public, and that you chose not to be told the rest,” Spiro wrote to Jigsaw Productions.

The letter also accused the production of declining multiple opportunities to fact-check its reporting directly with Musk’s team or with individuals who could have offered contradicting testimony.

“This project did not begin as an inquiry,” Spiro wrote. “It began with a conclusion … Because you have refused to screen the film, refused to fact-check it with us, and refused the witnesses who came to you, we have every reason to expect that it contains further statements about Mr. Musk that you know to be false, or whose falsity you have deliberately chosen not to investigate. We therefore have no choice but to put you on formal legal notice regarding your upcoming piece and to reserve all rights. Our door is open if you decide to check your facts with the people who know them.”

Musk himself took to X in the days following the premiere to publicly attack both the film and Gibney directly, despite reportedly not yet having watched the documentary himself.

“Gibney just assembled a hit list of people who either have an axe to grind or don’t even know me,” Musk wrote. “Horrible human.” In a separate post, Musk added: “Gutless Gibney’s fatal flaw of fabricating a false film.” Musk also described the film elsewhere on X as “a hit piece that misses and makes the fatal sin of being boring for 4 hours,” and separately wrote, “Gibney deliberately set out to make a hit piece and lacks any integrity whatsoever.”

Jigsaw Productions responded to Musk’s legal threat with a statement defending Gibney’s journalistic track record.

“Alex Gibney’s films are consistently recognized for their in-depth, fact-driven explorations of influential figures and corporations, coupled with his bold and engaging directorial style,” the statement read. “This approach has garnered him international praise, an Academy Award among other accolades, and a reputation that The Times of London recently lauded as the ‘gold standard for fearless journalistic integrity.’ The right to engage in open debate and fact-based examinations of powerful public figures is protected by the first amendment — something that should be recognized and defended by all Americans, including the associates of Elon Musk, who has proclaimed himself to be a ‘free speech absolutist.’”

The documentary, titled simply “Musk,” runs 225 minutes and examines the tech billionaire’s expanding influence across Tesla, SpaceX, X and his broader political activities. According to Deadline’s review of the film, it takes a particularly critical look at Tesla’s safety record and fatal incidents involving the company’s self-driving technology, with experts featured in the documentary accusing Tesla of overstating its vehicles’ battery range, misleading regulators, and promoting a battery-swapping network specifically to obtain government subsidies. The film also raises concerns about how Musk’s companies collect and could potentially use massive amounts of data to support his broader artificial intelligence ambitions.

Musk declined to participate directly in the documentary, though Gibney has said he had initially invited Musk to take part in the project. Because Musk himself did not sit for interviews, the film reportedly uses an AI-generated version of Musk’s voice to repeat his own previously made public statements throughout the documentary.

The film has drawn strongly positive reviews from critics following its Venice premiere, holding a 100% average critics’ rating on Rotten Tomatoes as of this week. The platform’s synopsis describes the documentary as “an incisive look behind the legend of Elon Musk, the world’s most heralded ‘inventor-entrepreneur’ who has enormous influence on the world in which we all live.”

The dispute between Musk and Gibney is not entirely new. According to The Hollywood Reporter, Musk predicted back in 2023 that the eventual documentary would amount to a “hit piece,” a characterization Gibney reportedly pushed back on at the time before proceeding with the project regardless.

The film’s premiere also drew attention for a separate development involving Ashley St. Clair, who gave birth to Musk’s 13th child last year. According to Variety, St. Clair revealed following the Venice premiere that her decision not to sign a nondisclosure agreement with Musk, one she said would have included a $40 million payment, ultimately allowed her to speak publicly about her former partner within the documentary itself.

“Musk,” distributed by Bleecker Street, is scheduled to hit U.S. theaters in October, following its Venice debut. With Musk’s attorney having formally put the production on legal notice and Musk himself continuing to publicly denounce the film on social media, the documentary’s theatrical release next month appears likely to arrive amid continued public sparring between the world’s wealthiest man and the Oscar-winning filmmaker behind one of the more closely watched documentaries of this year’s festival circuit.

SEOUL — LG Electronics said claims that its smart televisions record living-room conversations, even when the screen is dark, are “not true,” after a two-hour investigation alleged the sets can capture audio and map home networks.

The company issued the denial to Tom’s Hardware, CNET and Al Jazeera after Gamers Nexus, working with Level1Techs and independent researchers, published a 135-minute report on Monday. The video said testers pulled conversation transcripts from an LG set in standby, logged other devices on the same Wi-Fi network and sent data toward LG Ad Solutions. The report put the installed base at about 216 million smart TVs.

“The claims made in the recently published video are not true,” LG said. “LG TVs process voice data only when the voice button on the remote control is pressed and held, or when a wake word such as ‘Hi LG’ is recognized after the user has activated the Far-Field voice recognition feature. Other than these instances, the TVs do not collect or record ambient conversations.”

If the wake word is not recognized, the company said, “no voice data is transmitted to the server; the audio processing for wake word detection is performed locally on the device and is immediately deleted.” In a longer privacy note it added that sets “do not collect, record or transmit ambient conversations in your home, unless voice functionality has been intentionally activated by the user.” In standby, it said, the television “only monitors for the wake word if you have previously enabled the Far-Field feature.”

LG did not deny that its televisions scan the local network. “To provide smart TV functionalities, LG TVs feature the ability to scan for and connect to nearby devices on the same network,” the statement said. It called that “a standard function commonly provided by smart TVs and smart home devices.” On Automatic Content Recognition, which fingerprints what is playing on HDMI and other inputs for ads and recommendations, LG said the feature “is offered on an opt-in basis” and that without consent “ACR data is not used for advertising purposes.”

What the company did not address, several outlets noted, was the researchers’ claim that voice commands can sit in plaintext on servers and that a webOS flaw could let an attacker use the microphone even after a user flips a hardware mute. Gamers Nexus said a man-in-the-middle test on an OLED G5 produced live audio from a dark screen and again after the set was pulled off the internet. It also said the remote’s microphone can stay live when a switch on the set is off.

Smart-TV listening is not new. Wake-word systems from Amazon, Google and Apple keep a short audio buffer on the device. Content recognition is industry practice. What made this report travel is the combination of standby capture, network inventory and an advertising subsidiary that already faced a U.S. state case.

In May, LG Electronics USA settled a Texas lawsuit over ACR. Attorney General Ken Paxton said the company would obtain consent before collecting viewing data and add a pop-up that explains the practice and lets owners opt out. “LG has now taken important steps to ensure that users’ viewing data will not be collected without their informed consent,” Paxton said then. LG said it had worked with the state to strengthen an existing consent practice. Texas had sued LG and other brands in late 2025 over tracking without proper notice.

Owners who do not want a far-field mic can leave that setting off and avoid holding the remote’s voice key. That does not stop ACR if it was accepted at setup, and it does not stop the set from seeing a phone or speaker on the same router. Unplugging the Ethernet or cutting Wi-Fi stops cloud uploads. It does not, according to the researchers, silence a local microphone path.

LG is one of the largest TV brands in the United States and Europe. webOS sits on OLEDs that sell for more than $2,000 and on cheaper LCD sets. Advertising through LG Ad Solutions is part of how those boxes are priced. The company’s position is that voice is a button or a phrase the owner turned on, that network discovery is how Cast and AirPlay work, and that ads require a check box.

The investigators’ position is that a dark screen is not an off switch. LG’s statement draws a bright line at the wake word. It leaves the network scan on the table and leaves the plaintext and exploit claims unanswered. Until a regulator or a court tests those packets, owners have the company’s word, a Texas consent screen and a remote they can put in a drawer.

Follow