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UK economy grew by 0.1% in August.
Newsflash! The UK economy has returned to growth.
UK GDP is estimated to have grown by 0.1% in August, new data from the Office for National Statistics shows.
That will be a relief to chancellor Rachel Reeves.
But there’s bad news too – the economy is now thought to have shrunk by 0.1% in July, revised down from the initial estimate of no growth.
The ONS also reports that GDP grew by 0.3% in the three months to August 2025 compared with the three months to May 2025, a slight increase following growth of 0.2% in the three months to July 2025.
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The UK's consumer-facing services sector is struggling
Today’s GDP report also highlights weakness at service sector firms focused on consumers.
The UK’s consumer-facing services sector shrank by 0.6% in the three months to August, dragged down by:
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travel agency, tour operator and other reservation service and related activities (down 7.6%)
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other personal service activities (down 3.4%)
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buying and selling, renting and operating of own or leased real estate, excluding imputed rent (down 1.0%)
Treasury: for too many people our economy feels stuck
Responding to today’s GDP report, a Treasury spokesman has conceded that the economy feels ‘stuck’, saying:
“We have seen the fastest growth in the G7 since the start of the year, but for too many people our economy feels stuck. Working day in, day out without getting ahead.
The Chancellor is determined to turn this around by helping businesses in every town and high street grow, investing in infrastructure and cutting red tape to get Britain building.”
Earlier this week the IMF predicted the UK would be the second-fastest growing member of the G7 for 2025, following a relatively fast start to the year.
ONS: Some consumer facing services were weak
Here’s ONS director of economic statistics Liz McKeown on today’s UK growth report:
“Economic growth increased slightly in the latest three months. Services growth held steady, while there was a smaller drag from production than previously.
“Continued strength in business rental and leasing and healthcare were the main contributors to services growth, partially offset by weakness in some consumer facing services, while wholesalers also fared poorly.”
Today’s GDP report shows there was no growth in the UK services sector in August or July, but it did expand by 0.4% in the three months to August.
UK GDP: the key charts
Production grew, but construction shrank
UK manufacturing drove growth in August.
Today’s GDP report shows that production grew by 0.4% in the month, whereas services showed no growth and construction fell by 0.3% in August.
UK economy grew by 0.1% in August.
Newsflash! The UK economy has returned to growth.
UK GDP is estimated to have grown by 0.1% in August, new data from the Office for National Statistics shows.
That will be a relief to chancellor Rachel Reeves.
But there’s bad news too – the economy is now thought to have shrunk by 0.1% in July, revised down from the initial estimate of no growth.
The ONS also reports that GDP grew by 0.3% in the three months to August 2025 compared with the three months to May 2025, a slight increase following growth of 0.2% in the three months to July 2025.
Introduction: UK GDP report coming up...
Good morning and welcome to our rolling coverage of business, the financial markets and the world economy.
The UK economy is about to get its report card for August.
The latest monthly GDP report is expected to show only modest growth, with economists predicting an expansion of just 0.1% in August.
Although modest, that would be a small improvement on the previous month, as the economy flatlined in July.
Any growth will be welcome news for the government as chancellor Rachel Reeves works on the autumn budget; yesterday, she told The Guardian that higher taxes on the UK’s wealthy will form part of next month’s fiscal update.
There are hopes that UK manufacturing may have picked up in August, as Michael Field, chief equity strategist at Morningstar, explains:
“Manufacturing and industrial activity remain weak in the UK, with services doing a lot of the heavy lifting in terms of numbers thus far in 2025. Expectations are for August to show something of a reversal in this regard though, with industrial and manufacturing production likely to be positive for the month, potentially signalling some stability.
“Issues remain in the UK. Inflation remains high, as do interest rates, as the Bank of England awaits assurance that inflation is under control before cutting further. Equity markets are clearly anticipating an improvement though as they sit right below all-time highs.”
The agenda
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7am BST: UK GDP report for August
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7am BST: UK trade report for August
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10am BST: Eurozone trade data for August
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1pm BST: IMF Seminar: Debate on the Global Economy: “Shaping Economic Policies Amid a Shifting Global Landscape”
