Pre-Budget economy shows moderate growth as GDP inches up
GDP grew by 0.2% in August and by the same amount for the three months to August in what will be a welcome pre-Budget boost for Keir Starmer’s embattled government.
Construction output rose by 0.4% while factory gate production was up by 0.5%. The services sector posted more modest growth at 0.1%.
Liz McKeown, the Office for National Statistics’ director of economic statistics, 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 last 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.”
Joe Nellis, MHA’s economic adviser, said on today’s GDP data: “While the moderate growth in GDP announced this morning will no doubt be welcomed by the Government and business, they do reflect a UK economy that has been close to stagnation since July.
“The Government’s slow pace in addressing the problem of disappointing economic growth is not entirely by choice. They have faced a series of unfortunate delays, including the Office for Budget Responsibility requiring 10 weeks’ notice from the Government to prepare its pre-Budget economic and fiscal forecasts, as well as the interruptions caused by the summer parliamentary recess and the party conference season. These delays have impeded the timely communication of a coherent economic strategy to inspire confidence.
“The Government will be hoping that their long overdue Budget and a possible cut in interest rates by the Bank of England early next month will create a more conducive environment for investment, reigniting growth in the UK economy.”