UK Economy Sees Surprise Growth in August Ahead of Healey's First Budget

3-line summary

• The UK economy grew 0.1% in August, defying analysts' expectations of a slight contraction, per the BBC citing official ONS figures; growth over the three months to August came in at 0.7%. Growth was driven by a rise in production (manufacturing, oil and gas extraction, energy supply), while services were flat and construction contracted; ONS director Liz McKeown said computer programming was the biggest contributor to what she called 'robust' growth, though production and construction shrank over the three-month period. July's monthly growth was revised to 0.4% and June's to 0.4% from 0.3%.
• Chancellor John Healey, who delivers his first Budget in two weeks and is currently in Bangkok for the IMF's annual meeting, said the UK has shown resilience amid conflicts in Europe and the Middle East; the IMF this week praised the UK's debt-reduction plans. Capital Economics' Paul Dales said the economy was 'more robust than we thought' despite expected inflation pressure ahead, and PwC's Jake Finney said AI-infrastructure investment is underpinning UK growth, though the UK still lags the US in investment scale.

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