UK GDP grows 0.2% in September, Q3 up 0.7% and industrial output beats expectations

UK GDP data for September and the third quarter of 2026 has been released. Monthly growth beat market expectations and the industrial sector avoided the decline that was forecast. On the other hand, the goods trade deficit widened.

Economic growth

Indicator	Actual	Forecast	Previous
GDP m/m (September)	0.2%	0.0%	0.1%
GDP q/q (Q3)	0.7%	0.7%	0.5%
GDP y/y (Q3)	1.9%	1.9%	1.4%

The UK economy grew 0.2% in September, while markets expected no growth. Third-quarter growth of 0.7% was exactly in line with forecasts and up from 0.5% in the previous quarter. Annual growth rose from 1.4% to 1.9%.

Industrial sector

Indicator	Actual	Forecast	Previous
Industrial production m/m	0.3%	-0.3%	0.7%
Manufacturing production m/m	0.7%	-0.5%	0.7%

Markets expected declines in both, but industrial production rose 0.3% and manufacturing output 0.7%, the second straight month of 0.7% growth in manufacturing.

Trade balance

The goods trade deficit widened to £22.29 billion in September, against a forecast of £19.2 billion and £18.01 billion previously, meaning goods imports grew faster than exports.

What it means for the pound

• GBP: Better-than-expected growth and a stronger industrial sector support the pound and give the Bank of England more room to hold its current policy stance.
• Risk: The wider trade deficit is the weak spot of the report and may offset part of the positive impact.
• Pairs: GBPUSD and GBPJPY traders should read this data alongside the Bank of England's tone and US inflation data.

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Source: Office for National Statistics (ONS)