Britain’s economy grew by 0.1% in August, beating expectations of a contraction, although growth slowed from July’s 0.4% increase. Production rose while services were flat and construction fell.
The Office for National Statistics release, published on October 15, showed a stronger picture over three months. Output increased by 0.7% in June to August compared with March to May.
Economists polled by Reuters had expected a 0.1% monthly fall. The three-month growth rates for the periods ending in June and July were both revised up to 0.5%, from 0.4%.
Gross domestic product, or GDP, measures the value of goods and services produced. These real GDP estimates remove the effect of price changes and are adjusted for seasonal patterns.
Business services drive the three-month increase
Services output rose by 0.9% over the three months to August, providing the only positive contribution among the three main sectors. Production fell by 0.2% and construction by 1.0% over that period.
Professional, scientific and technical activities grew by 2.8%, with gains in accounting, research and legal services. Information and communication also rose by 2.8%, including a 5.0% increase in computer programming, consultancy and related activities.
Andrew Wishart, senior economist at Berenberg Bank, told Reuters, “The sector breakdown suggests that AI is behind much of the upswing”. The ONS industry totals do not separately measure how much of that growth came from artificial intelligence.
The broad direction continues the strength in business services described in our coverage of July’s growth figures. The latest release incorporates updated source data and revisions consistent with the annual national accounts.
August’s gains are uneven
For August alone, production rose by 0.8%, led by a 1.2% increase in manufacturing. Services recorded no growth after increases of 0.5% in both June and July, while construction fell by 0.2%.
Consumer-facing services fell by 0.3% during August. Sports, amusement and recreation activities, and food and beverage services, were the largest negative contributors. Businesses serving households therefore faced a weaker month than the headline GDP increase suggests.
The ONS said GDP was 2.1% higher than in August 2025. Across the three months to August, output was 1.8% above the same period a year earlier. Those annual comparisons measure a different period from the 0.7% three-month increase.
Early GDP estimates can be revised as more information arrives. September’s output is still needed to complete the picture for the third quarter; the ONS is due to publish its next monthly GDP release on November 12.
