UK growth is sending an encouraging signal to global investors

That is exactly why the latest figures for the UK economy deserve attention.

The UK economy grew by 0.7% between July and September, accelerating from 0.5% in the previous quarter and recording its fastest quarterly expansion since the first quarter of 2024. GDP was also 1.9% higher than a year earlier, while September itself delivered 0.2% growth.

For overseas investors looking at the UK, these are encouraging numbers.

What stands out is not simply the headline rate of growth, but what sits behind it. The services sector expanded by 0.9% during the quarter, with information and communication output increasing by 2.1%. Computer programming, consultancy and related activities increased by 4.4%, with the ONS pointing to strength among businesses involved in artificial intelligence and cloud computing.

Investment is another positive part of the picture. Gross fixed capital formation increased by 1.7% during the quarter, while household consumption rose by 0.6%.

Taken together, this paints a picture of an economy that is not simply growing, but demonstrating strength in precisely the areas that will increasingly determine international competitiveness: technology, innovation, business services and investment.

Resilience matters to investors

From a foreign direct investment perspective, resilience is important.

International businesses making decisions about where to deploy capital rarely base those decisions on one set of quarterly GDP numbers. These are long-term commitments and investors will consider everything from growth prospects and access to skilled people to infrastructure, the regulatory environment and connectivity.

However, economic momentum matters because it helps shape confidence.

For some time there has been a tendency to focus heavily on the challenges facing the UK. Those challenges should not be ignored, but neither should they obscure the underlying strengths of the economy.

Indeed, the latest figures are particularly significant because they have been achieved against an uncertain international backdrop. UK growth in the third quarter was the second fastest among G7 economies, behind only the United States, while growth so far this year is the strongest since 2017 if the post-pandemic rebound is excluded.

That is a powerful message internationally. The UK economy has been tested by significant external pressures and yet continues to demonstrate an ability to adapt and grow.

For investors considering establishing or expanding operations here, that resilience is an asset.

The fundamentals of the UK's investment proposition remain strong

This also reinforces some of the conclusions from our recent research into international investment.

Our latest Investment Confidence Index, produced with the Centre for Economics and Business Research (Cebr), assessed 48 UK locations across ten indicators covering growth potential, local skills and infrastructure. The research highlighted how investment decisions are increasingly influenced not only by national economic conditions, but by the individual strengths of cities and regions.

There is nevertheless an important distinction between having an attractive investment proposition and converting that attractiveness into completed projects.

Government figures showed that 1,020 FDI projects landed in the UK in 2025/26, down 25.8% on the previous year. Those projects still created 69,166 new jobs and safeguarded another 16,407, illustrating the very real economic value of inward investment.

That does not mean the UK is out of the woods as there are clear headwinds ahead. Inflationary pressures are expected to persist into 2027, potentially weighing on household spending and business investment, while the OBR has revised its forecast for economic growth next year down from 1.6% to 1%.

The recent Budget was also relatively cautious. While there were measures to support households and businesses, it was limited in overall scale and stopped short of the kind of far-reaching reforms or major new investment initiatives that some in the business community might have hoped would provide an additional catalyst for growth. 

Yet in many ways that makes the latest figures more impressive, rather than less. Against this backdrop, the UK economy is demonstrating a considerable degree of resilience.

One quarter does not settle the debate about the UK's long-term economic prospects, and businesses will rightly continue to scrutinise policy, costs and the wider global outlook.

But equally, we should recognise positive evidence when it emerges. Growth of 0.7%, rising business investment, a strong services sector and continued momentum in technology represent a genuinely encouraging combination.

From my conversations with businesses looking at the UK, the fundamental attractions remain compelling. Investors value talent, innovation, connectivity, a respected legal framework and access to sophisticated commercial markets. Those are qualities the UK already possesses.

At Irwin Mitchell, we have also seen our work for international clients grow significantly year on year as we support overseas organisations entering, investing in and expanding within the UK.

The latest GDP figures therefore provide something more than an encouraging economic headline. They strengthen the argument that, despite further economic challenges ahead, the UK economy remains resilient, adaptable and capable of generating growth.

For international investors considering where to make their next move, Britain continues to make a compelling case.