Ground rod driving. Water method?

If this is a shallow hole with water in it and you are actually driving the rod, only using the water for lubrication, it is legal. You can't jet down a hole and drop the rod in it tho. You have to drive it below grade anyway so that little hole is to give you room to connect the acorn ;-)

sounds good to me. i use a hammer drill or electric demo hammer (without a bit) to drive the rod. put the rod right into the chuck (don't tighten the chuck) and pull the trigger. the weight of the tool puts it right into the ground. no swinging hammers.
don't try this in the arizona desert...

Not heard of using water in the UK. Don't know if you have the same SDS drills we use, but we can get SDS-plus and SDS-max drill bits for inserting earth rods, although I often find a large hammer is more effective, depending on the makeup of the ground.

heavy clay soil -rural areas- urine works well.

SDS is kind of wimpy, I normally use a spline drive rotary hammer set on hammer. While they make ground rod driving adapters for these, they are entirely unnecessary, the soft ground rod will not harm the hammer face at all if the rod is inserted directly into the hammer. This easily drives rods through the soft shale rock we have here, which is extremely difficult to hammer a rod into with a 12 pound sledge.
There are many ways of enhancing ground rod effectiveness, some of which require drilling a hole and backfilling around the rod:

I am not sure if these methods are approved for residential grounding, I have only seen them used on engineered grounding systems where multiple rods are used and ground resistance is measured to verify low resistance.

Be sure you put the acorn on before you start driving the rod if you are beating the hell out of it. Once you mushroom the top, it won't fit.

Have you ever had to drive a rod through Perma-frost? We had to use an oxyacetylene torch to heat the rod. Get the tip red hot, drive it an inch or two, then pull it out & reheat it. It was below zero, and at an Army base with a record low ow -69F We used an entire tank of oxygen before we broke through the ice, and could drive it into the soil below. This was for the AM radio station's studio, to get rid of all the TV station's video on the radio studio's substandard ground system. :)