UK economic growth ticks higher in August - ONS
By Abigail Townsend
Date: Thursday 16 Oct 2025
(Sharecast News) - The UK economy expanded modestly in August, official data showed on Thursday, supported by the UK's dominant services sector.
According to the Office for National Statistics, GDP grew by 0.3% in the three months to August, in line with expectations and a slight increase on the 0.2% uplift seen in July.
Within that, services output grew by 0.4%, unchanged on July, while construction output rose 0.3%.
Production output was lower, falling 0.3%. But it was a notable improvement on July's downwardly revised 1.4% slide.
On a monthly basis, GDP rose 0.1%, following a downwardly revised 0.1% fall in July, and by 1.3% year-on-year.
Liz McKeown, director of economic statistics at the ONS, said: "Services growth held steady, while there was a smaller drag from production than previously.
"Continued strength in business rental and leasing and healthcare were the main contributors to services growth, partially offset by weakness in some consumer-facing services, while wholesalers also fared poorly."
James Smith, developed markets economist, UK, at ING, said: "We're always reticent to read too much into volatile monthly figures, which have been even more bumpy over recent months, given the frontloading ahead of tariffs and stamp duty changes earlier in the year.
"Generally though the economy is performing a little better than expected a few months ago. That helped boost our annual GDP forecast to 1.5% for this year."
However, Smith warned that the chancellor still faced a £25bn hole in her budget, caused predominantly by higher gilt yields, policy U-turns affecting government spending and expected downgrades from the Office for Budget Responsibility.
Rachel Reeves is due to present her Budget at the end of November.
Russ Mould, investment director at AJ Bell, said: "A lot of people view the UK as being in a difficult sport - lacklustre growth and a weak financial position. The outlook is far from rosy and there is a big risk that tax tweaks could further dampen consumer and business sentiment."
Ben Jones, lead economist at the Confederation of British Industry, said: "Activity remains patchy across sectors, with many businesses reporting subdued demand and higher operating costs. Firms are choosing to sit tight on hiring and investment until there's more clarity on the policy outlook."
The ONS also released trade figures alongside the GDP data. They showed the total goods and services trade deficit widened by £1.7bn to £5.2bn in the three months to August, after exports fell by more than imports.
Exports were 0.9% lower at £231.5bn during the period, but imports softened by just 0.1% at £236.7bn.
Exports of goods to the European Union fell 1.7%, while those to non-EU countries slid 5.2%.
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