Economists had been expecting to see growth pick up to 0.7% for the third quarter – between July and September – following growth of 0.5% in the second quarter.

The AI spending boom was a contributor to higher GDP in July, with the ONS revealing that many of the businesses reporting the largest turnover were involved in activities related to AI and cloud computing.

ONS chief economist Grant Fitzner said of the latest data: “The economy grew robustly in the third quarter almost entirely due to strong and widespread growth in the services sector.

“Within services, computer programming again increased strongly, as it has all year, registering its fastest growth in the last three years. We continue to see evidence that AI linked businesses helped to boost this sector.”

Growth has also been boosted by business investment, with spending on areas such as technology, infrastructure and defence becoming a key source of growth in the economy, experts say.

This is helping to offset the impact of higher energy prices on households and businesses since the start of the Iran war.

Prime Minister Andy Burnham said official data showing 0.7% growth in the third quarter was “welcome news”.

He said: “Despite a year where events around the world have pushed up costs here at home, our economy is growing, bringing hope for the future.

“Our job now is to keep focused on what matters to people: bringing down bills, creating good jobs, helping high streets thrive and backing businesses to grow.

“There is more to do, but we have a clear direction.

“Giving people breathing space now while making the long-term changes needed to deliver good growth in every part of Britain.”

Chancellor John Healey said the latest UK growth data shows Britain is showing “standout resilience” to the Middle East conflict.

He said: “Our UK economy is growing at the fastest rate in almost 10 years, outside the pandemic.

“We are backing UK investment, innovation and fast growth firms. I want to bring back confidence in Britain.”

Sanjay Raja, chief UK economist for Deutsche Bank, said there were a few key sectors that were boosting business investment – data centres and IT, defence and aircraft.

“Consumers have also been out in force, despite the energy shock,” he said.

“And businesses have remained fairly confident regardless of still-elevated geopolitical uncertainty.”

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