Britain's economy returned to growth in August after two months of flatness, giving Prime Minister Rachel Reeves a boost ahead of the autumn budget.
The Office for National Statistics (ONS) announced that gross domestic product increased by 0.2% in August, after recording zero growth in June and July. The numbers were in line with Citi economists' expectations.
Mr Reeves has pledged to use Labour's first budget in more than a decade to restart economic growth, with a plan to prioritize investment alongside measures to boost household incomes and fix crumbling public services. But she also warned that tough decisions would be needed to make ends meet.
Growth was flat at the start of the summer, with household budgets remaining under pressure from high prices and rising borrowing costs, while wet weather dampened private consumption.
The Bank of England began cutting interest rates in August, from 5.25% to 5%, as inflation returned to more normal levels. Although the central bank kept interest rates unchanged in September, financial markets widely expect borrowing costs to be lowered at the next policy meeting in November.
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