Britain’s economy recorded slight growth in August, rebounding modestly after a contraction in July, new data from the Office for National Statistics (ONS) revealed on Thursday, a sign of the fragile recovery confronting the Labour government as it prepares its first annual budget.
According to the ONS, the country’s gross domestic product (GDP) rose by 0.1 percent in August, following a revised 0.1 percent decline in July, which was previously estimated at zero growth.
While the August expansion aligned with analysts’ expectations, the downward revision for July dampened optimism about the pace of the recovery.
Businesses and households are already bracing for potential tax increases expected in Finance Minister Rachel Reeves’ upcoming budget on November 26. Reeves confirmed on Wednesday that she was “looking at tax and spending” decisions to ensure fiscal stability and close funding gaps.
The latest figures arrive amid persistent inflation and unemployment at a more than four-year high, raising concerns about the resilience of the UK economy.
> “The UK economy barely kept its head above water in August,” noted **Samuel Edwards**, Head of Dealing at global financial services firm Ebury. “Businesses remain on tenterhooks amid a fragile jobs market and Rachel Reeves hinting at further tax hikes.”
The ONS data showed that manufacturing output provided a modest lift during the month, offsetting weakness in the construction sector, which declined, while the services sector remained largely stagnant.
Economists say the Labour government faces a delicate balancing act,reviving growth while tackling inflation and maintaining fiscal discipline.
About the Author
