Every economic commentator in The Grauniad is unimpressed with the tiny 0.1% growth
"Economists are largely unimpressed by the modest growth of 0.1% recorded in the UK economy in August, and the 0.3% growth in June-August period.Lindsay James, investment strategist at wealth management firm Quilter, says the economy looks to be “stumbling to the end of the year”:“In the week that the International Monetary Fund gave the UK’s economic growth forecasts a small bump up, today’s GDP figures paint a picture of an economy stumbling to the end of the year after a strong start. Monthly GDP grew just 0.1%, giving a three-month rate of 0.3% - not exactly exciting figures. Markets will have been hoping for signs that the UK can maintain it’s early-year momentum but it appears that has now dissipated just as we approach a crunch Budget statement from the Chancellor. Rachel Reeves will need to find a tonic and quickly if she is to extricate the economy from its current malaise.“There are a number of obstacles coming down the track for the economy too. The IMF confirmed the UK has an inflation problem and is struggling to get out of it. That will continue to put pressure on the consumer. Meanwhile, both businesses and individuals are fearful of what is coming at November’s budget after Rachel Reeves confirmed tax rises are being looked at. Last year showed just how much impact that uncertainty can have on economic growth and now this year appears as if it will be no different.Suren Thiru, economics director at chartered accountancy group ICAEW, calls today’s growth figures ‘anaemic’:“This dishearteningly meagre return to growth will do little to allay fears over the wellbeing of the UK economy, with higher manufacturing output masking weaker activity in other sectors, notably services and construction.“August’s increase is unlikely to have triggered a noteworthy pickup in economic growth across the third quarter with higher inflation and free-falling business confidence expected to have restrained output in September.“November’s Budget is casting a long shadow over the UK economy with growing worries over more tax rises likely to prompt greater caution among consumers and businesses to spend and invest throughout the Autumn.“While a rate cut next month looks improbable, these anaemic figures mean it’s not quite a done deal as it gives those rate setters worried over economic conditions with more encouragement to vote to relax policy.”Ruth Gregory, deputy chief UK economist at Capital Economics, reckons there is little reason to think GDP growth will accelerate much from here, explaining:The meagre rise in real GDP in August suggests growth is still being hampered by high interest rates, higher taxes and soft overseas activity. With business sentiment on the floor and employment still falling, we doubt growth will improve much in Q4.Raj Badiani, economics director at S&P Global Market Intelligence, is similarly cautious:“UK economic growth is set to be muted in the next few quarters with private sector activity facing a damaging mix of external pressures, alongside increasing trepidation amid firms and consumers ahead of yet another difficult budget event. The latest short-term indicators suggest an end to the recent upward drift in the 2025 growth projection.“We expect UK real GDP growth to stand at 1.4% in 2025 and 1.0% in 2026. Despite persistent growth concerns, still-elevated earnings growth and the prospect of headline inflation rising to 4% in September are likely to rule out a further interest rate cut this year. The first-rate cut is expected to occur in February 2026 and the Bank rate to stand at 3.25% at the end of next year"