UK Growth Edges Up as Budget Costs and Tech Selloff Weigh on Business
The UK economy expanded by 0.1% in August, beating expectations of a slight contraction, with manufacturing up 1.2% while services were flat and construction fell 0.2%. Three-month growth reached 0.7%, led by computer programming, though production and construction contracted over that period. Ahead of the 28 October Budget, employers are seeking relief from hiring and business rates costs, while US inflation and AI investment concerns drove sharp falls in technology shares and insolvency notices included 5 administrations, 16 liquidations and 1 winding-up petition.
August output grew slightly, contrary to forecasts of a small decline. Factory production increased, services showed no change, and building activity slipped. Over three months, expansion was stronger, helped most by computer programming, even as production and construction shrank.
Before the 28 October Budget, firms are lobbying for lower hiring and premises-tax burdens. Meanwhile, US price pressures and doubts about AI spending hit technology stocks. The day’s insolvency filings comprised five administrations, sixteen liquidations and one winding-up petition.
The uneven expansion could affect households, workers and small firms differently. Manufacturers may benefit from firmer output, while construction and flat services might stay cautious. If Budget measures ease hiring or rates costs, employers could invest or recruit more; without relief, higher expenses may influence prices, pay or jobs. Technology share declines may hit investors and savers. Rising insolvency notices could threaten employment and supplier payments, so credit conditions may matter for local economies.