Advertisement

British economy bucks summer slowdown to return to growth on services sector surge

Britain's economy rebounded into the black in August helping maintain a longer-term "modest" growth trend led by car manufacturing and sales, the country's main statistical agency said Thursday. File photo by Will Oliver/EPA-EFE
Britain's economy rebounded into the black in August helping maintain a longer-term "modest" growth trend led by car manufacturing and sales, the country's main statistical agency said Thursday. File photo by Will Oliver/EPA-EFE

Oct. 12 (UPI) -- Britain's economy returned to growth in August, rebounding from a sharper-than-initially estimated 0.6% contraction in July, the country's main statistical agency said Thursday.

Gross Domestic Product grew by 0.2% driven solely by a 0.4% expansion of the services sector, which accounts for the largest proportion of the economy, with all other key sectors posting negative growth, according to the Office for National Statistics' latest bulletin.

Advertisement

Output in consumer-facing services fell by 0.6% after dropping 0.2% in July, revised down from zero, and production output picked up slightly from a revised 1.1% slump in July but remained in negative territory, down 0.7%.

The construction sector extended a 6-month-long slump -- broken only by a 1.6% blip in May -- shrinking 0.5% in August, down from a revised 0.4% contraction in July.

Viewed by the longer-range quarterly reading, the economy maintained its positive growth trend, expanding by 0.3% in the June to August period, the ONS said, helped by a 1.2% spurt in production output and 0.9% in construction -- but services growth was virtually flat.

August lacked significant impacts of recent months that either boosted or hindered growth from extra holidays, and industrial disputes and extreme weather, with services driving "broad-based" growth with standout contributions from education, computer programming and engineering.

Advertisement

"Across the three months as a whole the economy has grown modestly, led by car manufacturing and sales, and construction," ONS Economic Statistics Director Darren Morgan wrote on social media.

The official estimates come two days after the International Monetary Fund forecast Britain would have the weakest growth among the world's advanced economies in 2023 and 2024 -- with the exception of Germany where IMF said the economy would contract in 2023 before rebounding to +0.9% growth in 2024.

Latest Headlines