Some economists had predicted no growth and the latest figure builds on growth of 0.3% in June and zero growth in May.

The Office for National Statistics said expansion in the services, production and construction sectors had contributed to expansion in July.

ONS director of economic statistics, Liz McKeown, there was evidence that businesses involved with artificial intelligence and related technologies helped to boost the sector, not just in July but in May and June as well.

She also said some businesses had said that the warm weather and football world cup had affected activity in July, although she said the effects “differed across industries, benefitting some businesses while creating challenges for others”.

The ONS said that in the three months to July, the economy grew by 0.4% compared with the previous three months, reports our sister paper Daily Business.

The data is a boost for Chancellor John Healey ahead of the 28 October Budget, although rising oil prices and government borrowing costs continue to overshadow any plans he has for easing pressures within the economy.

He said: “Britain’s economy is demonstrating a welcome resilience, despite serious global uncertainty. Our growth although still fragile was the fastest in the G7 in the first half of the year. But, the conflict in the Middle East does have impacts here at home – from the cost of the weekly family shop to the cost of government borrowing.”

Stuart Morrison, research manager at the British Chambers of Commerce, said: “While today’s headline growth data is welcome news, the warning lights of cost pressures and global uncertainty are still flashing for many of the businesses we represent. “

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.”

Stock markets could see a more positive end to the week after the recent rout. London’s blue-chip FTSE 100 index closed 61 points lower at 10,609 on Thursday, marking its fifth consecutive decline.

Asian markets weakened overnight after Wall Street’s fourth consecutive fall. The S&P 500 lost 0.6% and the Nasdaq declined 0.7%.

Australia’s ASX 200 closed around 1.5% lower, its weakest level in almost two months, while Japan’s Nikkei 225 finished approximately 2.3% down.

Brent crude remained above $105 a barrel following further disruption and military activity around the Strait of Hormuz.

The elevated price threatens to fuel inflation and increase pressure on the Bank of England to raise interest rates. Sterling traded around $1.3513.