UK economy grew 0.1% in August ahead of Healey's first Budget

The UK economy showed modest growth in August, growing by 0.1%, according to the latest official data released by the Office for National Statistics (ONS) ahead of Chancellor John Healey's first Budget. This modest increase was higher than what analysts had anticipated. The slight rise followed a robust growth of 0.4% in July. Global economic watchdog the International Monetary Fund (IMF) had earlier upgraded its outlook for Britain's economy, complimenting the nation's growth prospects amidst global economic challenges.

Despite this, Healey faces a challenge to present a balanced Budget without resorting to additional borrowing.

The UK economy's growth in August was primarily driven by an uptick in production, encompassing manufacturing, oil and gas extraction, and energy supply. However, the services industry, which constitutes the largest part of the UK economy, remained stagnant, while the construction sector contracted. Over the three-month period ending in August, the UK's economy expanded by 0.7%.

ONS Director of Economic Statistics, Liz McKeown, attributed this growth largely to the computer programming sector, describing the growth as "robust." Yet, she noted that the production and construction sectors witnessed a contraction over the three-month span. The economic figures were unveiled as Healey was in Bangkok, attending the annual meeting of the International Monetary Fund.

IMF Managing Director Kristalina Georgieva had previously praised the UK's plans to reduce debt levels, highlighting that the country demonstrated a comparatively stronger growth trajectory than other G7 nations in the face of global economic shocks. Healey, upon his arrival in Bangkok, expressed satisfaction with the IMF's endorsement of the UK's economic plans in London.

He reaffirmed his commitment to adhere to the economic path forward as he prepares to deliver the Budget in two weeks.