UK economy's 'remarkable' growth in pre-Budget boost to Chancellor John Healey

UK economy's 'remarkable' growth in pre-Budget boost to Chancellor John Healey Official figures show the UK economy grew by 0.1% in August - defying forecasts it would shrink - to add to a strong 2026 to date The UK economy defied experts by growing in August - in another pre-Budget boost for Chancellor John Healey. Figures from the Office for National Statistics reported that gross domestic product - the value of everything the country churns out - increased by 0.1% in August. While it wasn’t much, and marked a slowdown from 0.4% growth in July, it confounded economists who predicted a fall. The ONS also said the economy grew by 0.4% in June, revising its previous prediction of 0.3%. Another month of growth also adds to what has been a strong year-to-date compared with other big economies. The uptick will likely give added confidence to Mr Healey as he prepares to deliver his maiden Budget on October 28. To see more of the stories you love from The Mirror and to find them easily in Google then make us your preferred source. Free and easy-to-do, just click on the link here to find more from The Mirror at the top of your feed. Mr Healey called the figures "welcome news". He added: "Despite conflicts in the Middle East and Europe hitting people across the world, today’s figures offer more proof of Britain’s resilience in the face of these global shocks. Speaking at a meeting of finance ministers in Bangkok, he said: “Today, I’m discussing what we can do to limit the impact of global events on the UK. My Budget will build on this approach to drive good growth in every postcode, provide some breathing space for today, and offer fresh hope for the future.” Simon Pittaway, principal economist at think tank the Resolution Foundation, said: "The UK economy has been remarkably resilient in the first half of the year, especially given the disruption caused by conflict in the Middle East. “Maintaining strong growth throughout the year is going to be tough, but momentum appears to have lasted the summer.” Despite that, he warned Mr Healey was likely to set out a weaker outlook for the economy given the ongoing impact of the Middle East war on energy prices. Rob Wood, chief UK economist at consultants Pantheon Macroeconomics, said: "We have to shift from describing UK growth this year as resilient to calling it strong. " The sting in the tail for borrowers is that makes the chances of a Bank of England rate hike next month even more certain. The Bank's Monetary Policy Committee (MPC) is forecast to up its base rate from 3.75% to 4%. "We expect the MPC to hike in November and February, with risks skewed to further hikes next year if energy prices fail to fall back soon," Mr Wood said. TUC General Secretary Paul Nowak said: “It’s great to see the economy continue to strengthen. But despite growth returning, working people up and down the country are still under the cosh with energy bills rising as a result of Trumps’s illegal war - and banks are enjoying bonanza profits. “This needs to change. The Chancellor needs to deliver a Budget that ensures the gains of growth are shared. That means cutting households’ energy bills by taxing banks’ enormous profits, and putting more money in workers’ pockets - so Britain can get back to spending on the high street.” Chris Beauchamp, chief market analyst at online trading platform IG, said: "Whisper it quietly, but things have started to brighten for the UK. Construction is still struggling but services and manufacturing are showing signs of decent growth. " Scott Gardner, investment strategist at JP Morgan Personal Investing, said: “Given the uncertain global situation and rising energy prices, it is positive to see the economy continuing to grow at pace despite these challenges.” Growth in August was significantly driven by the production sector, which grew by 0.8% for the month - the fastest rate for nine months. The ONS said that this was partly driven by growth in manufacturing. Meanwhile, the key services sector was flat for August following strong growth in the previous two months. Yael Selfin, chief economist at KPMG, said: “The UK economy had shown considerable strength in the first eight months of the year, despite significant external headwinds from the Iran conflict and higher energy prices. However, households now face renewed pressure from rising wholesale natural gas prices and higher long-term interest rates, which could weigh on activity over the coming months. “Against this backdrop, the Chancellor may feel inclined to take a cautious approach at the upcoming Budget, keeping net borrowing on a declining path as a share of GDP whilst avoiding major tax rises.” Ben Jones, senior lead economist at the CBI, said: “The economy has generally performed well so far this year. But amid rising inflation and tightening financial conditions, maintaining that momentum does look difficult, with a more subdued end to 2026 in prospect.”