UK GDP for August 2025

The British economic system expanded by a lackluster 0.1% in August, in line with the newest figures from the Workplace for Nationwide Statistics.

“Manufacturing grew by 0.4% in August 2025, whereas providers confirmed no development and building fell by 0.3% in August,” the ONS famous.

Economists polled by Reuters had anticipated month-on-month development of 0.1%. The ONS revised its development knowledge for July, which initially confirmed the economic system flatlining, saying it now assessed that the economic system had shrunk by 0.1%. That adopted a 0.4% growth in June.

The slowdown in development will not be a shock, with economists forecasting a moderation in financial exercise. Third-quarter GDP is because of be launched in mid-November and shall be carefully watched for additional indicators of a deceleration.

The economic system grew by a better-than-expected 0.3% within the second quarter, down from 0.7% seen within the first quarter, which was boosted by the entrance loading of enterprise exercise forward of U.S. commerce tariffs in April.

“Some course correction is probably going after a superb begin for the U.Okay. economic system,” Sanjay Raja, Deutsche Financial institution’s chief U.Okay. economist, stated in emailed feedback this week.

“Certainly, after a powerful first half of 2025 momentum, we anticipate development to shift to a decrease gear within the second half [of the year]. We see quarterly GDP monitoring round 0.2% quarter-on-quarter – however there are draw back dangers brewing.”

Economists are looking forward to the Financial institution of England’s subsequent assembly on Nov. 6 to see whether or not the central financial institution’s policymakers will vote to decrease rates of interest additional with a purpose to increase development. The primary impediment to that’s sticky inflation, with the patron worth index at 3.8% in August.

Nonetheless, economists say there’s a case for fee cuts because the labor market weakens (with the unemployment fee rising) and wage development pressures proceed to ease.

The BOE’s Financial Coverage Committee (MPC) could possibly be cautious about meddling with rates of interest forward of the federal government’s Autumn Price range on Nov. 26, nevertheless.

Finance Minister Rachel Reeves is predicted to announce tax rises and spending cuts that might put a dampener on shopper spending, enterprise funding and, in the end, development.

The newest development knowledge will give the chancellor pause for thought, Scott Gardner, funding strategist at J.P. Morgan owned digital wealth supervisor, Nutmeg, famous Thursday.

“Because the Autumn Price range approaches and the Chancellor more and more depends on OBR development projections, this slowdown will concern policymakers and will make all of the distinction in relation to tax and spending choices. Unlocking development is crucial to easing the U.Okay.’s monetary pressures and placing the economic system again on stable floor,” he stated in emailed feedback.

Economists at Goldman Sachs stated in evaluation Tuesday that whereas there was a case for slicing, the BOE was more likely to wish to see extra progress on inflation earlier than slicing charges once more, after a trim in August lowered the benchmark rate of interest to 4%.

“Specifically, normalisation in measures of underlying providers inflation — which strip out the noise associated to unstable and controlled costs — has stalled in latest months. Furthermore, headline inflation is more likely to stay near 4% within the the rest of 2025 given upward strain from meals costs, specifically.”

Goldman stated it anticipated to see vital progress in providers inflation within the first half of 2026, however believed the MPC “is more likely to wait with extra cuts till they see tangible progress in providers inflation.”