Business · Economy · 14 hrs ago
UK economy forecast to shrink in August after strong summer growth
Economists expect the UK economy to have shrunk in August, mainly because services activity weakened.
The Office for National Statistics is due to publish the monthly growth figures on October 15.
The forecast follows growth of 0.3% in June and 0.4% in July, when services helped lift output.
One economist predicts a 0.3% fall in August, while another expects a smaller 0.1% decline.
Both forecasts point to weaker activity across much of the economy, while manufacturing is expected to have been roughly flat.
The economists say one weaker month would not necessarily undo the broader summer growth, but rising inflation and other pressures could slow the economy later in the year.
The official figures will show whether August matched those expectations.
The UK economy is forecast to have contracted in August after stronger-than-expected growth in June and July.
The Office for National Statistics is due to publish the monthly growth figures on October 15.
Economists expect weaker output across the main parts of the economy, particularly in services.
Forecasts differ, with estimates ranging from a 0.1% to a 0.3% decline.
One economist expects third-quarter growth of 0.4% to 0.5%, despite the predicted August fall.
- Who
- UK economists forecast a decline in economic output; the Office for National Statistics will publish the figures.
- What
- The economy is forecast to have contracted in August.
- When
- August 2026; the figures are due on October 15.
- Where
- The United Kingdom.
- Why
- Economists expect a correction after strong June and July growth, with weaker services output.
This story does not have two clearly opposing sides.
The crucial judgment for August is how much of that surge has unwound.
The outlook beyond the summer is more difficult.
The UK economy grew 0.3%, with hospitality and leisure firms benefiting from football fever and prolonged hot weather.
GDP grew 0.4%, with services and increased business use of AI contributing to growth.
Economists forecast that the economy contracted, with estimates ranging from 0.1% to 0.3%.
The Office for National Statistics is due to publish the monthly economic growth data.
- June growth
- 0.3%
- July growth
- 0.4%
- August forecast
- 0.1% to 0.3% contraction
- Services growth in July
- 0.6%
- Third-quarter forecast
- 0.4% to 0.5% growth
Sources
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