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12h ago

UK GDP Edges Up 0.1% in August After July Revision, Keeping Pressure on Reeves Before Budget

A sector split left growth fragile, foreshadowing tough choices on tax, rates, spending.

People browse in a fruit shop at Harringay Green Lanes, also known as 'London's Little Turkey,' in London, March 24, 2025. REUTERS/Isabel Infantes
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The UK’s dominant services sector was boosted by strong retail sales and good weather
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Overview

  • Official ONS data show output rose 0.1% in August after July was revised to a 0.1% fall, matching economists’ expectations.
  • Growth over the three months to August was 0.3%, with the economy 1.3% larger than a year earlier.
  • Production increased 0.4% in August, including a 0.7% rise in manufacturing, while services were flat and construction fell 0.3%.
  • The figures offer limited relief for Chancellor Rachel Reeves as she prepares the 26 November Budget, with reports of a £20–30 billion gap driving talk of tax rises and spending restraint.
  • The IMF projects the UK near the top of G7 growth but flags the risk of the highest G7 inflation in 2025–26, leaving the Bank of England holding rates at 4% with further cuts uncertain.