The UK economy grew by 0.2% in August, official figures showed | business news

Official statistics show the UK economy grew by 0.2% in August.

The slight rise in gross domestic product (GDP), a measure of a country's total output, comes after two straight months of recession.

The figures released by the Office for National Statistics (ONS) were consistent with economists' predictions.

Liz McKeown of the ONS said: “All major sectors of the economy grew in August, but the broader picture is that growth has been slowing in recent months compared to the first half of the year.”

She added: “Accounting, retail and many manufacturers showed strength in August, while construction also recovered from a contraction in July, partially offset by declines in wholesale and oil extraction.”

The ONS also estimated that the economy grew by 0.2% in the three months to August.

Good timing for growth recovery

paul kelso

business correspondent

@pkelso

The recovery to growth of 0.2% in August after two months of stagnation is modest and confirms the expected slowdown in the second half of the year, but is nonetheless generally welcome given its timing.

The Prime Minister and Prime Minister are preparing to welcome hundreds of international investors to an investment summit in London on Monday. Britain received a reception and royal lubricant.

This event is vital because if the new Government is to deliver on its promise to accelerate growth by overhauling the country's infrastructure, the UK cannot do it alone. Foreign capital investment is so important that any evidence of vitality, even if marginal, in an ailing economy is helpful.

In her immediate reaction to the figures, Rachel Reeves acknowledged as much after coming into 11th place, including welcoming growth and not highlighting the poor state of the public finances she inherited, as she has done before.

If gallows humor is allowed at the Treasury, she might argue that she is already driving growth thanks to her attempts to avoid that outcome with just three weeks left before the first Budget. The Office for National Statistics reported today that professional services, including accountancy, rose 4.3% in August.

Prime Minister Rachel Reeves welcomed the figures as “good news” as the government prepares to host an international investment summit next week.

She added: “Growing the economy is this Government’s top priority so we can fix the NHS, rebuild Britain and build a better life for workers.”

“Change won’t happen overnight, but we waste no time delivering on our commitment to change.”

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The services sector was the main contributor to growth, increasing 0.1% in August after a similar increase in July.

Officials confirmed there had been no revisions to previous estimates of zero growth for both June and July.

Researchers also found that the UK's total primary trade deficit widened from £3 billion to £10 billion in the three months to August 2024, due to increased imports of goods.

Ashley Webb, an economist at research firm Capital Economics, said the August GDP figures “provide some support for our view that a slight growth slowdown in the second half of the year is more likely than another recession.” “he said.

This comes ahead of the Bank of England's next interest rate decision in November. According to the latest figures on Friday, financial markets had put the chances of a cut at 80%.

Suren Thiru, director of economics at the Institute of Chartered Accountants, said: “Although interest rates are still likely to fall in November, these positive figures provide ample encouragement to hawkish interest rate makers on the economic situation to ensure that a deal is still in place. “It means it’s not over,” he said. Stop voting to relax policies.”

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