UK GDP rose 0.2% in August after two months of no growth. All sectors helped fire back up the economy with many retailers and manufacturers enjoying a strong month but ONS warns the broader picture is for slowing growth.
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK GDP figures: “The sun shone, the Bank of England cut interest rates and businesses were still enjoying a post-election confidence boost.
“After two months of flatlining it will be welcome news to the government that forward economic momentum returned in August, although 0.2% isn’t exactly the kind of growth that it needs to power the country forward.
“All sectors were feeling spritely and with such a focus on planning reform and housebuilding targets it will be pleasing that both new housing work and private commercial work got a boost. We already saw the data that showed retailers enjoyed a resurgence of sales in August in spite of the riots which forced some businesses to shut up shop for several days.
“But the broader picture is of a country still trudging along, finding it hard to change gear. And there’s concern that August was a blip, and that September’s numbers will herald a return to the flatline that seems to have become the new normal.
“We know business confidence took a hit after Keir Starmer’s warnings that things would get worse before they get better and amid continuing concern about what the chancellor’s first budget has in store.
“News of additional private investment in energy infrastructure is massively welcome and the big push to deliver clean power by 2030 does create an opportunity for sustainable change.
“Rachel Reeves has welcomed today’s growth figures but must feel the weight of responsibility as she tries to balance the country’s books and deliver the incentives needed to enable growth at the same time.”
