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United Kingdom GDP August 2018

United Kingdom: The economy flatlines in August, data for June and July revised upward

According to monthly GDP data released by the Office for National Statistics (ONS), economic activity was unchanged in August over the prior month in seasonally-adjusted terms, undershooting market analysts’ expectations of 0.1% growth. However, the expansion for June-August was larger than expected at 0.7%, thanks to upward revisions to GDP data for June and July. Looking at a sector-by-sector picture, in August the services sector was stagnant, while industrial production expanded and construction and agriculture declined.

Taking GDP data for July and August together suggests a robust GDP outturn in Q3, with the economy buoyed by warm weather boosting consumer spending. However, James Smith, Developed Markets Economist at ING, cautions that headwinds are likely to build in the final quarter: “Sunny weather has given UK growth a much-needed boost over the summer, but the combination of Brexit uncertainty and consumer caution suggests the economy faces a challenging autumn and winter”.

UK GDP Forecast

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