UK economy returned to growth in August

The UK economy returned to growth in August as manufacturers and retail businesses had a “strong” month, official figures show.

The economy expanded by 0.2% in the month after flatlining for two months before, the Office for National Statistics (ONS) said.

However, the ONS warned the “broader picture” in the UK was one of “slowing growth in recent months”.

The latest figures come as the government prepares for the Budget at the end of October.

Prime Minister Sir Keir Starmer has warned the Budget will be “painful”, with the government admitting some taxes will rise.

Liz McKeown, director of economic statistics at the ONS, said accounting, bookkeeping and auditing businesses had helped to boost the economy alongside retail and manufacturers.

She added construction also bounced back from July’s downturn, with new infrastructure projects starting up, but added: “The broader picture is one of slowing growth in recent months, compared to the first half of the year.”

The Chancellor, Rachel Reeves, who is set to deliver her first Budget on 30 October, said she welcomed the return to growth.

“Growing the economy is the number one priority of this government so we can fix the NHS, rebuild Britain, and make working people better off,” she said.