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United Kingdom GDP August 2023

United Kingdom: Economic activity rebounds in August

GDP grew 0.2% month-on-month in seasonally-adjusted terms in August (July: -0.6% mom), in line with market expectations. On a rolling quarterly basis, GDP rose at a faster rate of 0.3% in June–August (May–July: +0.1% qoq).

August’s rise was largely due to a rebound in the services sector. Within services, education activity rose in August after a sharp decline in July due to strike action. Professional, scientific and technical activities were the other key growth driver within services. In addition, manufacturing activity dropped at a more moderate pace.

Our panelists expect the economy to have broadly stagnated over Q3 as a whole, and to flatline again in Q4 amid high interest rates.

On the outlook, Berenberg’s Kallum Pickering said: “In the very near-term, risks are skewed to the downside. While we expect output to continue to stagnate through winter, we cannot rule out the risk of a mild technical recession. Through spring and summer next year, cumulating real income gains as inflation subsides further and less tight monetary policy from Q2 onwards as the BoE begins to gradually take its foot off the brake can support a gradual recovery in real GDP.”

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