Economy set to shrink ahead of Budget in ‘difficult’ outlook
The UK economy is expected to have shrunk in August, despite hopes that the stronger-than-expected growth seen in June and July would continue. The latest gross domestic product (GDP) data, which will be released on Thursday, is expected to show a contraction of 0.1 per cent in August, according to City economists polled by Bloomberg. [...]
The UK economy is anticipated to contract by 0.1 percent in August, according to Bloomberg's survey of City economists. This contraction comes despite the stronger-than-expected growth seen in June and July, which was attributed to record temperatures boosting the hospitality sector and AI lifting the services industries. However, the data for August may reveal a more significant decline, with Robert Wood, chief UK economist at Pantheon Macroeconomics, predicting a 0.1 percent contraction.
All major sectors of the economy, particularly the crucial service sectors, are expected to report weaker output. Thomas Pugh, chief economist at RSM, forecasts that the economic outlook beyond the summer is more difficult, with inflation likely to rise to around 4.5 percent early next year and unemployment projected to trend back above 5 percent.
Such economic pressures may prompt the Bank of England to raise interest rates four times by next summer.
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