Gross home product (GDP) grew by 0.1% in August, in accordance with the Workplace for Nationwide Statistics (ONS), beating economists’ expectations of a 0.1% contraction.
The shock enlargement was pushed largely by the manufacturing sector, which grew by 0.8% through the month – its quickest charge of progress in 9 months, in what some commentators have referred to as a ‘Burnham enhance’.
Manufacturing was a serious contributor, with output rising by 1.2%, helped by progress within the pharmaceutical sector.
The figures provide a lift to the economic system forward of the autumn Price range, though additionally they present that progress has slowed following stronger efficiency earlier in the summertime.
The economic system expanded by 0.4% in July, whereas the ONS revised its estimate for June upwards from 0.3% to 0.4%.
Manufacturing leads the best way as manufacturing facility output rises
The newest figures spotlight the significance of Britain’s manufacturing sector in maintaining the economic system rising.
Manufacturing output elevated by 0.8% in August, with manufacturing rising by 1.2% as pharmaceutical manufacturing offered a elevate.
The power of the sector helped the economic system keep away from the month-to-month contraction economists had anticipated, regardless of strain on family spending and uncertainty within the international economic system.
Nevertheless, not each a part of the economic system carried out as nicely. The companies sector, which accounts for a serious share of UK financial exercise, was flat in August after robust progress through the earlier two months.
There was power in motorcar gross sales, however bars and eating places recorded a 2.7% month-to-month decline.
Building additionally remained beneath strain, shrinking by an additional 0.2% in August amid the affect of excessive mortgage charges.
UK economic system grows 0.7% over three months
Wanting past the month-to-month figures, the economic system grew by 0.7% within the three months to August.
ONS director of financial statistics Liz McKeown stated: “GDP progress confirmed additional power within the newest three months, led by the companies sector, whereas each manufacturing and development fell.”
The figures recommend the UK economic system has proven resilience through the first a part of the yr, regardless of international uncertainty and better vitality prices.
Nevertheless, economists have warned that rising inflation and tighter monetary situations may make it tougher to maintain progress in the direction of the tip of 2026.
Beneficial studying
Yael Selfin, chief economist at KPMG, stated: “The UK economic system had proven appreciable power within the first eight months of the yr, regardless of important exterior headwinds from the Iran battle and better vitality costs.
“Nevertheless, households now face renewed strain from rising wholesale pure fuel costs and better long-term rates of interest, which may weigh on exercise over the approaching months.
“In opposition to this backdrop, the Chancellor could really feel inclined to take a cautious method on the upcoming Price range, maintaining internet borrowing on a declining path as a share of GDP while avoiding main tax rises.”
Ben Jones, senior lead economist on the CBI, stated: “The economic system has usually carried out nicely to date this yr.
“However amid rising inflation and tightening monetary situations, sustaining that momentum does look troublesome, with a extra subdued finish to 2026 in prospect.”