UK economy sees surprise growth in August ahead of Healey’s first Budget

From July through August, the United Kingdom posted a modest but notable 0.7% quarterly growth. According to ONS Director of Economic Statistics Liz McKeown, advances in computer programming were the primary engine behind what she described as “robust” performance.

She also noted that the production and construction sectors shrank over the three‑month period.

August’s surprise expansion follows growth of 0.4% in July, and the Office for National Statistics later revised its June estimate upward to 0.4%, up from 0.3%.

Capital Economics’ chief economist, Paul Dales, characterized Britain’s economy as “more robust than we thought.”

He cautioned that rising inflation could still dampen growth, yet highlighted the economy’s remarkable resilience amid higher energy prices and tighter borrowing conditions.

PwC senior economist Jake Finney pointed to the rapid development of AI infrastructure as a driver of the nation’s relatively strong results.

“The UK still lags the US in both the scale of that investment and the boost it provides to growth, but it is making progress and remains ahead of many of its European peers,” he added.

The latest figures were released after Healey arrived in Bangkok for the IMF’s annual gathering.

Shortly before, the OECD praised the UK’s plan to slash public debt, noting that soaring global borrowing costs have led to a slightly brighter growth outlook than among other G7 nations.

Healey said that despite conflicts in the Middle East and Europe afflicting people worldwide, the current numbers demonstrate Britain’s resilience in the face of these global disruptions.

He announced that following the meeting, the government would proceed toward its Budget to “provide some breathing space for today, and offer fresh hope for the future”.

The Conservatives argued that the growth statistics conceal troubling trends in key sectors as a pivotal budget nears.

Shadow Chancellor Andrew Griffith declared that construction has slumped for four consecutive months, with private home building facing the steepest decline; he pressed Labour to accelerate housing delivery, which is lagging.

Griffith urged Healey to introduce tax cuts and ease bureaucratic regulation.

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