Healey hails surprise UK growth as ‘sign of resilience’ ahead of Budget
Britain’s economy grew by 0.1% in August, confounding economists who had predicted a small contraction, according to the latest Office for National Statistics data. Over the three months to August, output rose 0.7% — a figure Chancellor John Healey described as “a sign of resilience in the UK economy that some had not expected.”
ONS director of economic statistics Liz McKeown attributed much of that “robust” quarterly expansion to computer programming, even as production and construction both contracted over the period. August’s upturn follows a 0.4% rise in July, with June’s growth also revised upward from 0.3% to 0.4%. Stronger output across energy supply, manufacturing and oil and gas extraction drove the improvement, while the dominant services sector stalled and construction shrank further.
Healey linked the data partly to global economic headwinds, telling the BBC “it’s really tough in the face of these economic global shocks,” and noted the figures arrived just after the International Monetary Fund raised its forecast for the UK economy this year. Speaking from Bangkok, where he had landed for the IMF’s annual meeting, he said the growth reflected “part of the discipline the IMF here in Bangkok this week has endorsed that they see in Britain.” IMF managing director Kristalina Georgieva had earlier praised the government’s debt-reduction plans, saying the UK was enjoying “a bit of a better growth prospect” than its G7 peers.
Independent economists offered a more cautious read. Capital Economics’ Paul Dales said the figures showed the economy was “more robust than we thought,” though he cautioned that an anticipated rise in inflation would still “dampen growth” despite “remarkable resilience to higher energy prices and borrowing costs.” PwC’s Jake Finney pointed to AI-related investment as a growing driver of UK output, noting “the UK still lags the US in both the scale of that investment and the boost it provides to growth, but it is making progress and remains ahead of many of its European peers.” Healey said artificial intelligence’s economic effects were still emerging, noting that “the impact of AI on the economy, on productivity, is only just beginning to register,” and that the technology carried “huge potential, as well as huge risks.”
The growth data lands two weeks before Healey’s first Budget, which he promised would bring people “a bit of breathing space from the cost of living and cost of business pressures” without abandoning fiscal discipline — insisting any new spending must be paid for “within the Budget that we’ve got.” He confirmed public sector pay would not receive inflation top-ups, telling reporters that departments must “manage with the budgets we’ve got, deliver the public services they need, and that’s the challenge.”
The opposition was unconvinced. Shadow chancellor Andrew Griffith said the economic growth figures “conceal worrying trends in key sectors as we approach a crucial Budget,” pointing to the fact that “construction has now shrunk for four months in a row, with private housebuilding falling fastest. Labour promised to get Britain building, but they are failing.” He urged the chancellor to lower taxes and ease regulation on business. Liberal Democrat Treasury spokesperson Daisy Cooper dismissed the 0.1% monthly figure as “nothing to celebrate,” saying the economy was “stuck in first gear and barely crawling forward, while families are still struggling to make ends meet.”
Source: BBC News