UK GDP Growth Beats Forecasts in August on Higher Production Output

05:53 AM EDT, 10/15/2026 (MT Newswires) -- The UK's economic growth surprised on the upside in August, largely buoyed by an increase in output in the production sector, according to data from the Office for National Statistics published Thursday. The country's gross domestic product grew 0.1% month over month in August, following a 0.4% rise in July and beating market forecasts of a 0.1% contraction. ONS data showed that monthly output in the production sector rose 0.8% in August, after an upwardly revised 0.3% growth in the prior month, bolstered by increases in manufacturing, mining and quarrying, as well as electricity, gas steam and air conditioning supply. In contrast, the construction industry saw a 0.2% downtick in output, marking the fourth straight month of decline. Monthly output in the services sector, meanwhile, showed zero growth, following an upwardly revised 0.5% gain in July. On an annual basis, the British economy expanded 2.1% in August, against the revised 1.8% growth a month before and the consensus estimate of a 1.7% gain. In the three months to August, UK GDP rose 0.7%, compared with 0.5% growth in the three months to July, mainly driven by growth in the services industry. "Following three years over which growth has averaged 1.1%, the acceleration through the 2% threshold gives the data some wow factor. The sector breakdown suggests that AI is behind much of the upswing. Rapid increases in computer programming output continued, raising the output of the 'information and communication' sector by 7.1% yoy and contributing about +0.5ppt to annual growth," Berenberg said, noting that increases in output in the information and communication, and the professional, scientific and technical activities sectors "explain the recent pickup in growth." "Economic growth driven by pockets of strength makes it tricky to set interest rates appropriately for the whole economy. However, the expansion in the two rapidly growing sectors of the UK economy has not resulted in any pickup in employment," the research firm added. "Thus, barring a renewed surge in energy prices, we remain content with our view that the BoE need only hike once, on 5 November."