The UK’s monthly gross domestic product (GDP) expanded by 0.1% in August, according to the Office for National Statistics (ONS).
This follows two months of 0.4% growth in June and July – with June’s figure revised up from an original figure of 0.3%.
The ONS noted that August’s growth was due largely to a 0.8% expansion in production. Meanwhile, services experienced no movement and construction dropped by 0.2%.
On a quarterly basis, production output saw a 0.2% drop, while construction output dropped by 1%. Services output expanded by 0.9%, following 0.7% growth in the three months to July.
In the three months to August, real GDP rose by 0.7%, an improvement on the 0.5% growth in the three months to June and July – both of which were revised up from original figures of 0.4%.
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Performance is ‘better than expected’ but pressures remain
The tentative growth is a positive sign, but it does little to offset the ongoing struggle of economically stretched households, as inflation and mortgage rates remain high.
Richard Pike, chief sales and marketing officer at Phoebus Software, commented: “The UK economy is performing better than expected, and this week the IMF upgraded its growth forecast for 2026. But three months of modest expansion does not necessarily point to a sustained recovery, and the key question is whether growth is broad-based or masking weakness elsewhere in the economy.
“For the majority of people, the current economic situation feels like a contradiction – the UK economy is growing yet households feel poorer, businesses are under pressure and the public finances are stretched.
“In the mortgage market, borrowers are still weighing up affordability and the cost of borrowing, while lenders are dealing with customers in increasingly different financial circumstances.
“With the Budget just a fortnight away, the Chancellor will need to turn any signs of economic resilience into measures that support sustainable growth. For the housing market, that means addressing the pressures on household finances and creating the conditions for buyers to commit with greater confidence.”
