Arabic version: اقتصاد المملكة المتحدة يتجاوز توقعات النمو في أغسطس

According to Cnbc, the U.K. economy grew 0.1% in the month to August, exceeding economists’ expectations for a 0.1% contraction. The result followed month-on-month growth of 0.4% in both June and July, indicating slower momentum in British gross domestic product.

Production rose 0.8% in August, helping offset weak performance elsewhere, the Office for National Statistics said. Services recorded no growth, while construction output fell 0.2%. On an annual basis, GDP increased 2.1%, above the 1.7% expected by economists and the strongest year-on-year reading since August 2022.

Markets reacted after the release, with the British pound rising 0.4% against the U.S. dollar. Gilt yields fell across the curve, and the benchmark 10-year gilt yield was last trading 9 basis points lower at 5.3364%.

The figures arrive as the U.K. faces a cost-of-living crisis linked to sticky inflation and higher energy costs following the Russia-Ukraine war and the Iran war. The government is due to unveil its Autumn Budget later this month, while seeking to follow fiscal rules intended to rein in public debt and address rising consumer costs. Analysts said weaker growth momentum could add pressure on finance minister John Healey before his first budget on Oct. 28, particularly as high debt-interest costs constrain fiscal headroom.

Joe Nellis of MHA said the economy remained fragile despite continued growth, warning that tax increases could weaken consumer spending, confidence and corporate investment. Scott Gardner of J.P. Morgan Personal Investing said the outlook for the rest of the year remained uncertain. Sanjay Raja of Deutsche Bank said the U.K.’s resilience story continued, while cautioning that energy prices and higher interest rates could weigh on household incomes, spending and investment.