New data from the ONS shows that gross domestic product recorded a 0.2% lift in August. This is an increase on June and July which saw no growth at all, with the services sector seen as the main contributor, which rose by 0.1% in August.
However, ONS remain cautious, stating that compared to H1 the broader picture indicated “slowing growth”.
Liz McKeown, from the ONS, said**:** "All main sectors of the economy grew in August, but the broader picture is one of slowing growth in recent months, compared to the first half of the year."
"In August, accountancy, retail and many manufacturers had strong months, while construction also recovered from July's contraction. These were partially offset by falls in wholesaling and oil extraction."
Chancellor Rachel Reeves added: "Growing the economy is the number one priority of this government so we can fix the NHS, rebuild Britain, and make working people better off.
"While change will not happen overnight, we are not wasting any time on delivering on the promise of change."
Suren Thiru, economics director at the Institute of Chartered Accountants, said: "While interest rates are still likely to fall in November, these positive figures mean it's not quite a done deal by giving the more hawkish rate setters enough encouragement over economic conditions to hold off voting to relax policy."
Mike Randall, CEO at Simply Asset Finance commented: “A marginal rise in GDP offers some hope for the economy, and could suggest businesses are remaining optimistic. However, many businesses are still tentatively waiting for transparency before making any bold moves. This is understandable ahead of a budget, but it's vital the Government provides clarity and reassurance to the UK’s 5.5million SMEs on October 30th, if it is to successfully achieve growth.
“And there’s clear potential for growth. Just last month the OECD updated its growth forecasts for 2024 from 0.4% in May to 1.1%. However, reaching this goal will be impossible without ensuring the success of small and medium-sized businesses. While there are important fiscal challenges to solve in Labour’s first budget, we urge the Government to prioritise pro-business policy to ensure that SME growth ambitions and economic recovery are not overlooked.”
