span>span>Thursday 16th October 2025/span>span> - 11:09 (BST)/span>/span>
The UK economy showed marginal growth in August with monthly real GDP rising by 0.1%, rebounding from a revised 0.1% contraction in July. The modest increase came largely in line with market expectations, reflecting a mixed economic landscape where certain sectors recovered while others continued to struggle.
Production output led the upswing, climbing 0.4% after a similar-sized fall in the previous month. Manufacturing was a key contributor (expanding 0.7%) alongside moderate gains in electricity, gas, steam and air conditioning supply (0.4%) and water, sewerage and waste management (0.3%). These gains were partially offset by a sharp 2.3% drop in mining and quarrying, highlighting the uneven nature of the recovery.
The services sector remained stagnant for a second consecutive month. While administrative and support services rose 1.0% and human health and social work activities increased 0.4%, these were outweighed by declines in wholesale and retail trade, arts and entertainment and transport and storage. Construction also underperformed, slipping 0.3% as repair and maintenance activity fell 1.5%. Overall, the data point to a tentative and uneven growth trajectory with ongoing sectoral disparities.
Analysts expect the subdued growth to keep the pound under moderate pressure. With the Bank of England having limited room for further stimulus, sterling may face volatility against both the dollar and the euro - particularly if global investors interpret the data as a signal of a fragile domestic recovery. Attentions now turn to the UK’s Autumn Budget on 26th November where further tax rises are expected to make up a £22bn shortfall in the government's finances.
