The UK economy shrank by 0.3% in August, according to new data from the Office for National Statistics (ONS).

This decrease in GDP was unexpected following a 0.1% growth in July, and strengthens concerns the UK will soon fall into recession.

GDP also fell by 0.3% in the three months to August compared to the three months to May 2022.

Production was the main driver behind the fall in GDP in August, dropping by 1.8% after a 1.1% decrease in July. This can be attributed to a 1.6% fall in the manufacturing industry.

Services declined by 0.1%, with health and social work activities falling by 1.3%, while the arts, entertainment and recreation industries dropped significantly by 5.0%.

However, the construction industry grew by 0.4% in August, compared to 0.1% in July, driven by a 1.9% increase in new work.

Commenting on the data, head of research at the British Chambers of Commerce (BCC) David Bharier said:

"To build business confidence, Government must rapidly provide more detail on its fiscal policies and supply side reforms, particularly at a time when businesses face the twin crises of rising interest rates and high inflation."

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