UK economy forecast to contract in August after summer surge

Summarised from 2 outlets · Updated 11 Oct, 09:24 · Archive

The UK economy is expected to have shrunk by 0.3% in August after stronger growth in June and July.

The UK economy is forecast to have shrunk by 0.3% in August, according to Robert Wood, chief UK economist at Pantheon Macroeconomists. This would represent a correction following stronger-than-expected growth in the previous two months. The economy grew 0.3% in June, aided by hospitality and leisure firms benefiting from football fever and prolonged hot weather, and then 0.4% in July as the services industry and businesses increased their use of AI drove expansion.

Experts expect August's contraction to be driven by weakness across the services sector. Mr Wood predicted that the three key service sectors – professional services, administration, and information and communication – would show notable weakness after professional services, administration and information and communication posted particularly strong growth of 0.6% in July, their strongest monthly showing since April 2022.

The Office for National Statistics will release the official monthly economic growth data on Thursday 15 October.

How it is being reported

• Economy set to shrink ahead of Budget in ‘difficult’ outlookThe 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. [...]City AM · 11 Oct, 10:49
• UK economy set to contract after strong start to summer, say expertsRobert Wood, chief UK economist at Pantheon Macroeconomists, predicted that the latest statistics will reveal a 0.3% decline in August.Independent Business · 11 Oct, 09:00

In this story: Robert Wood · Pantheon Macroeconomists · Office for National Statistics · UK

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