UK economy unexpectedly grows 0.1% in August despite fall in consumer spending
Summary
The UK economy grew by 0.1% in August, which was more than expected despite a drop in consumer spending. This growth happened amid rising energy costs and global economic challenges tied to the war in the Middle East.Key Facts
- The UK’s GDP grew 0.1% in August, after 0.4% growth in July.
- Economists had predicted the UK economy would shrink by 0.1% in August.
- Consumer spending fell during this period, but business activity linked to artificial intelligence increased.
- Rising energy costs due to the Middle East conflict are impacting British households and businesses.
- Chancellor John Healey will deliver a budget on October 28, under pressure to support people and businesses.
- Government borrowing costs have increased, making budget decisions more difficult.
- The International Monetary Fund recently raised its growth forecast for the UK this year but expects slower growth in 2027.
- The UK showed the strongest growth rate in the G7 during the first half of 2026.
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