UK economy returns to growth in August with 0.2% rise in GDP

12 October 2023, 08:10

The service sector has given a boost to the economy
The service sector has given a boost to the economy. Picture: Alamy/ONS

By Emma Soteriou

The UK's economy grew slightly in August, with the country's service sector helping it bounce back.

Listen to this article

Loading audio...

Gross domestic product (GDP) increased by 0.2% over the month, the Office for National Statistics has said.

Data showed some of the biggest gains were for architects and engineers, with their sector growing by 4.7%, helping the services sector grow by 0.4% overall in August.

The education sector, which previously shrunk due to strikes in July, rose by 1.6%.

But other parts of the service sector did not see gains, with the arts, entertainment and recreation sector shrinking by 7.4%.

"Our initial estimate suggests GDP grew a little in August, led by strong growth in services which was partially offset by falls in manufacturing and construction," ONS director of economic statistics Darren Morgan said.

"Within services, education returned to normal levels, while computer programmers and engineers both had strong months.

"Across the last three months as a whole the economy has grown modestly, led by car manufacturing and sales, and construction."

Read more: Rachel Reeves unveils plan to speed up infrastructure planning to revive economy as Starmer warns against complacency

Read more: Hooray for Hollywood! Hunt hails Warner Bros expansion plan to create 4,000 jobs and £200m boost to UK economy

The UK's economy grew slightly in August
The UK's economy grew slightly in August. Picture: ONS

The ONS also said it had downgraded July's performance from a fall of 0.5% to a 0.6% drop.

The revision was partially due to the performance of consumer-facing service businesses. The output of companies had previously been thought to have been flat in July, but revised estimates show that the sector contracted by 0.2%.

Chancellor Jeremy Hunt said the data showed "the economy is more resilient than expected".

“The UK has grown faster than France and Germany since the pandemic and today's data shows the economy is more resilient than expected," he said.

"While this is a good sign, we still need to tackle inflation so we can unlock sustainable growth."