The UK economy grew modestly in August, although July’s GDP was downgraded. With the effects of higher interest rates now being felt, the economy’s prospects remain decidedly in the balance.
12 October 2023
UK GDP growth came in bang in line with expectations for the month of August at 0.2%. Good news you may think – well perhaps not, as July’s monthly reading was revised down further to -0.6%. Services remained the only area showing growth of 0.4% whilst both the manufacturing and construction sectors fell, by -0.7% and -0.5% respectively. A wet August looks likely to have impacted on all sectors to some degree but a lessening in industrial action should have contributed a small positive effect. The impact of the Bank of England’s (BoE) aggressive hiking campaign is only just starting to bite, according to Swati Dhingra, a BoE committee member. It won’t take much more rate pain to push the economy into more of a slowdown, so as ever the outlook for the UK economy remains precariously balanced.
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