After a flat July, the UK economy grew by 0.2% in August, with construction and manufacturing leading the way. Construction saw a 0.4% increase, driven by a 3.4% rise in private new housing projects and a boost in repair work. This suggests early positive effects from Government planning reforms and a slight reduction in mortgage rates.
The services sector grew by 0.1% due to a 1.6% rise in professional, scientific, and technical activities. Accounting, bookkeeping, and auditing services saw a notable 4.3% increase, while the legal sector grew by 1.7%, and scientific research and development expanded by 2.8%. Retail trade also contributed, growing by 1.2%.
However, several service subsectors saw declines, including arts, entertainment, and recreation (-2.5%) and health and social work (-1.1%). Wholesale and retail trade, administrative services, and transport also experienced contractions.
The Office for National Statistics (ONS) reported an 0.8% GDP increase in the three months leading up to August 2024 compared to the same period in 2023. However, concerns remain about inflationary pressures and the potential negative impact of upcoming budget announcements on growth.
Chancellor Rachel Reeves said:
“It’s welcome news that growth has returned to the economy. Growing the economy is the Government’s number one priority so we can fix the NHS, rebuild Britain, and make working people better off.”
Talk to us about your business.