UK economy growth in August beats forecasts as GDP rises 0.1%
The UK economy grew by 0.1% in August 2026, Office for National Statistics figures showed, defying City economists' forecasts of a 0.1% contraction despite a fall in consumer spending ahead of John Healey's budget.
UK economy growth in August beats forecasts as GDP rises 0.1%
Growth beats expectations
UK GDP growth in August came in at 0.1%, according to Office for National Statistics figures, slowing from 0.4% in July but ahead of City economists, who had predicted a 0.1% contraction.
Spending falls before budget
The rise came even though consumer spending fell in the run-up to chancellor John Healey's budget, which the ONS data showed the economy withstanding. Healey is due to deliver his tax and spending statement to the Commons on 28 October, less than a fortnight after the figures were published.
What lay behind the rise
Official figures suggested one factor behind the surprise rise was strong expansion in AI-related business activity. The month also fits a stronger picture for the year so far:
- Britain recorded the strongest rate of growth in the G7 in the first half of 2026.
- The economy showed more resilience than expected at the start of the Iran war.
Pressure on the chancellor
Healey will face a delicate balancing act at the budget, amid a sharp increase in government borrowing costs as he weighs a possible package of support. The war in the Middle East is rattling the global economy and hitting British households and businesses with a surge in energy costs. The International Monetary Fund this week upgraded its UK growth forecasts for 2026, while warning it expected a modest slowdown in 2027 due to higher energy prices.
gross domestic product (GDP) rose by 0.1% last month, compared with 0.4% growth in July
Healey's budget statement to the Commons is scheduled for 28 October, less than a fortnight after the data was released.
