By Chris Dorrell
The UK economy returned to growth in August as the strength of the services sector prevented activity from contracting for a second month in a row.
According to figures from the Office for National Statistics (ONS), the economy grew 0.2 per cent in August, in line with economists’ expectations.
The services sector grew at 0.4 per cent, the main contributor to GDP growth. Consumer facing services however dipped into contraction while the production sector fell by 0.7 per cent in August.
Commenting on today’s GDP figures for August, ONS Director of Economic Statistics Darren Morgan said: “Our initial estimate suggests GDP grew a little in August, led by strong growth in services which was partially offset by falls in manufacturing and construction. “
Within services, education returned to normal levels, while computer programmers and engineers both had strong months,” he continued.
ONS figures revised down performance in July, with the body now thinking the economy contracted by0.6 per cent fall rather than 0.5 per cent, when wet weather and strike action dented performance.
Despite the slight growth in August, the outlook for the UK is not very rosy. New forecasts from the International Monetary Fund earlier this week suggested the UK would be the worst performing major economy next year, growing at just 0.6 per cent.
“The decline in growth reflects tighter monetary policies to curb still-high inflation and lingering impacts of the terms-of-trade shock from high energy prices,” the IMF said.
More to follow
