
Britain’s economy edged back into growth in August, expanding by a marginal 0.1% from July, official data revealed on Thursday, providing a slight boost ahead of Finance Minister Rachel Reeves’ November budget. However, GDP for July was revised downward to show a 0.1% decline from June, highlighting ongoing volatility in the economy, according to the Office for National Statistics (ONS). Annual growth stands at 1.3%, leaving limited room to avoid potential tax increases.
Economists noted that growth remains fragile, with early indicators for September pointing to muted expansion. Public health service activity supported the slight quarterly growth of 0.3% in the three months to August, while consumer-facing services contracted. Experts warned that the services and construction sectors are in a “pre-budget funk,” and uncertainty around fiscal policy could dampen household and business spending further.
The Bank of England is maintaining a careful stance, keeping interest rates at 4% amid stubborn inflation and weak growth. Governor Andrew Bailey noted a softening labor market, with rising unemployment and slowing private sector wage growth. Monetary Policy Committee member Alan Taylor also flagged the risks of a “bumpy landing,” citing the ongoing effects of U.S. trade tariffs and domestic budget uncertainty.
Pic courtesy: google/ images are subject to copyright