The UK's economy grew slightly in August according to official figures released before Chancellor John Healey's planned Budget announcement later this month. The Office for National Statistics said the expansion of 0.1% exceeded what analysts had predicted. However, the figure represented a slowdown compared to July's growth of 0.4%.
Production, which covers manufacturing, oil and gas extraction and energy supply, drove August's growth. The services sector, which represents the largest part of the economy, showed no movement during the month, while construction shrank. Over the three months to August, the economy grew by 0.7% overall, with the computer programming industry contributing most significantly to this performance, according to ONS director of economic statistics Liz McKeown.
Economists offered cautiously positive assessments. Paul Dales, chief UK economist at Capital Economics, said Britain's economy was 'more robust than we thought', though he warned that rising inflation would 'dampen growth'. He highlighted the economy's 'remarkable resilience to higher energy prices and borrowing costs'. The International Monetary Fund previously praised the UK's debt reduction plans and said the country had 'a bit of a better growth prospect' than other G7 nations.
Chancellor Healey said he was pleased the IMF had backed Britain's economic plans, noting the UK 'stands out on growth' despite global economic challenges.