UK GDP rose by 0.2% in August, reports Office for National Statistics, with accountancy, retail and many manufacturers having strong months
- output in services rose by 0.1%, production by 0.5% and construction by 0.4%
- UK economy returns to growth in boost to Rachel Reeves before budget
The Labour government needs to build on the 0.2% growth reported in August, says Lindsay James, investment strategist at Quilter Investors:
“After two months of stagnant growth, and downward revisions for previous quarters, UK GDP has finally shown some growth, despite the lack of summer sunshine. GDP increased by 0.2% on the month, helping the economy bounce back after a difficult period. While growth remains sluggish and momentum appears to be stalling, this figure will provide a sigh of relief for the new Labour administration after a difficult start to life in government. However, given the mandate it has to deliver economic growth and wealth creation, it will need to build on this progress.
“Despite the UK experiencing better-than-expected growth this year and upward revisions in economic forecasts, the gloom surrounding the economy has been hard to shake. Much of this is due to Labour’s rhetoric as they attribute difficult tax and spending decisions to their predecessors. Additionally, bond yields have risen recently as debt continues to grow and inflationary threats persist. Until there is clarity from this month’s Budget, consumer and business confidence will likely remain muted, delaying any economic boost from these better GDP numbers.
“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.”
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