The UK economy returned to growth in August after flatlining for two months, driven by expansion in the services, manufacturing and construction sectors.
The Office for National Statistics (ONS) said that gross domestic product (GDP) grew by 0.2% during the month. The expansion follows two months of zero growth experienced in June and July, and was in line with analyst forecasts.
ONS director of economic statistics Liz McKeown said: “All main sectors of the economy grew in August, but the broader picture is one of slowing growth in recent months, compared to the first half of the year.
“In August accountancy, retail and many manufacturers had strong months, while construction also recovered from July’s contraction. These were partially offset by falls in wholesaling and oil extraction.”
Services output grew by 0.1% in August 2024, production output grew by 0.5% and construction output grew by 0.4% year-on-year
The figure from the ONS comes less than three weeks before the Labour government’s first budget.
Alice Haine, personal finance analyst at Bestinvest, said: “August’s 0.2% expansion is likely to be comforting for the new government as it looks towards its first budget on 30 October when chancellor Rachel Reeves is expected to deliver a raft of ‘painful’ tax rises.
“The positive growth figure may even help to quell the government’s doom-mongering about the state of the country’s finances, something that has had a detrimental effect on business and consumer confidence in recent weeks.”
Chancellor Rachell Reeves is expected to raise taxes to fill a £25bn gap in public finances.
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