UK GDP expected to fall in August after summer growth surge
Economists anticipate a 0.3% drop in UK output for August, reversing the strong gains recorded in June and July.
UK economic data for August are predicted to show a modest contraction after two months of unexpected growth. The services sector, which drove a 0.6% rise in July thanks to AI and cloud demand, is expected to lose momentum, with professional services, administration and information and communication reporting notable weakness. Robert Wood of Pantheon Macroeconomists expects a 0.3% drop, whereas Thomas Pugh of RSM UK foresees a smaller 0.1% decline.
Manufacturing output is likely to be roughly unchanged, as gains in some plants are balanced by a slump in automotive production. Despite the monthly dip, Pugh cautions that the broader trend remains resilient, projecting 0.4%-0.5% growth for Q3 2026 but warning of slower growth later in the year and a sluggish start to 2027.
Why it matters
A fall in UK output could signal rising inflation pressures and a tougher economic outlook for businesses and consumers.
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