- UK GDP grew 0.1% in August as manufacturing recovered from Trump tariff shock
- Revised figures show the economy contracted 0.1% in July
- Over the three months to August growth picked up slightly to 0.3%, from 0.2% in the three months to July
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK GDP figures:
“Stuck is the word that the Treasury and chancellor have consistently used to describe how many people feel about the UK economy. Even though the IMF forecast the UK to deliver the fastest growth out of all G7 countries except the US this year, it’s not the kind of growth that improves lives or that the government is hoping for.
“Instead, the pace of growth has been decelerating, with the pre-tariff front loading surge at the start of the year now a distant memory and the massively important service sector feeling the weight of consumer insecurity.
“In August, manufacturing provided a bright spot as the global supply chain continued to rebalance and trade deals restored a degree of confidence, but that rekindling of activity couldn’t fully offset a decline in construction work or a stalled service sector. During the summer holidays, the shock of long, warm and dry days meant many parents didn’t need to spend money to keep their kids occupied – though there was a boost for bars and restaurants.
“Nervousness about the path of rate cuts and constant speculation about potential Budget changes put the brakes on the housing sector, but there was a surge in rental activity, which suggests would-be buyers are still cautious and hoping the government will come up with some kind of carrot that can help aspiring homeowners.
“A single month won’t come close to giving the real picture of what’s going on with the economy, with heightened uncertainty about global and domestic issues a concern in the longer term. The question is how the economy can find a higher gear when consumers are displaying an abundance of caution and businesses are lacking the confidence to move forward.”
