UK economy grows a little less than expected in August

The UK economy grew a touch less than expected in August despite the easing of Covid measures, according to figures released on Wednesday by the Office for National Statistics.
The economy grew 0.4% in August following a 0.1% contraction in July. This was a little weaker than consensus expectations for a 0.5% increase and leaves GDP 0.8% below its pre-pandemic level in February 2020.

July’s contraction was revised down from a previous estimate of 0.1% growth.

The service sector grew by 0.3% in August, while manufacturing was 0.5% higher. Production output rose 0.8%, thanks mainly to the reopening of oil rigs, while construction output shrank 0.2%.

Darren Morgan, director of economic statistics at the ONS, said: “The economy picked up in August as bars, restaurants and festivals benefited from the first full month without Covid-19 restrictions in England.

“This was offset by falls in health activity with fewer people visiting GPs and less testing and tracing.

“However, later and slightly weaker data from a number of industries now mean we estimate the economy fell a little overall in July.”

Paul Dales, chief UK economist at Capital Economics, said: “The improvement in August probably had a lot to do with the fading of the restraint from July’s ‘pingdemic’, which at one point meant more than 1m people were self-isolating.”

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