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19h ago

UK GDP Inches Up 0.1% in August as July Is Revised to Contraction

The figures sharpen the choices for Chancellor Rachel Reeves before the 26 November Budget, with weak output set against persistent inflation.

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 GDP rose 0.1% in August after a 0.1% fall in July, delivering 0.3% growth over the three months to August and a 1.3% year-on-year increase.
  • Output was uneven across sectors in August, with production up 0.4% including a 0.7% rise in manufacturing, services flat, and construction down 0.3%.
  • The monthly reading matched a Reuters poll that pointed to a 0.1% gain, and the ONS revised July from an earlier estimate of zero growth to a 0.1% decline.
  • The IMF this week said the UK is on course for the G7’s second-fastest growth in 2025 but warned inflation is likely to be the highest in the bloc in 2025–26.
  • With the Bank Rate at 4% and services inflation still sticky, economists expect the Bank of England to proceed cautiously on further cuts as Reeves weighs tax and spending decisions for a budget shortfall widely seen in the tens of billions of pounds.