Britain’s economy expanded slightly in August after shrinking the previous month, official data showed Thursday, highlighting the challenges faced by the Labour government ahead of its annual budget.
The Office for National Statistics (ONS) said gross domestic product rose 0.1 percent in August compared to a contraction of 0.1 percent in July, which was revised down from zero growth.
While August’s figure met expectations, analysts said the downward revision for July tempered optimism about the recovery.
Businesses and consumers are bracing for widely expected tax rises in Finance Minister Rachel Reeves’ budget on November 26.
Reeves on Wednesday said she was “looking at tax and spending” measures to ensure the public finances add up.
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The data comes as Britain endures stubbornly high inflation and unemployment at a more than four-year high.
“The UK economy barely kept its head above water in August,” said Samuel Edwards, head of dealing at global financial services firm Ebury.
“Businesses remain on tenterhooks amid a frail jobs market and Rachel Reeves hinting at further tax hikes,” he added.
The manufacturing sector helped give the economy a boost in August, while services were stagnant and the construction sector declined.
AFP
