Britain’s economic output grew 0.2 percent in August after contracting 0.6 percent in July, the Office of National Statistics reported. The increase matched the expectations of economists surveyed by The Wall Street Journal.
The gain came solely from the services sector, which grew by 0.4 percent. Science, tech, and education services were strongest. However, retail services, such as fitness classes and hair styling, and food services were down 0.6 percent.
Manufacturing slumped 0.7 percent, marking its third decline in the past four months. Construction activity was off by 0.5 percent.
The economy overall grew 0.3 percent through May, June, and July.
Early signs point to another overall contraction in Britain’s economy in September, U.K. economist Ruth Gregory at Capital Economics, said in a recent note.
The flow of data shows “the fragility of economic growth in the U.K.,” the WSJ noted. “GDP has see-sawed from growth to contraction in each month since February.”
TREND FORECAST: The mainstream business media made a big deal that U.K. inflation registered 6.7 percent in August. But this is virtually the same as July’s 6.8-percent reading, yet the Bank of England held its key rate steady.
Thus, they held rates because they see bad times ahead. High interest rates, sticky inflation, and slumps in retail sales and manufacturing output argue for a worsening outlook, leading to a recession beginning this quarter or next, especially as winter weather raises demand for fossil fuels during a Mideast war.