The UK saw GDP growth for August of -0.3% and in July GDP growth was revised down to 0.1% (from 0.2%).
Over three months to August, GDP fell 0.3% and the UK’s GDP is now 0.5% above its pre-coronavirus level in Q4 2019.
The production sector, which includes manufacturing, mining and quarrying, Electricity and gas, steam and air conditioning supply, and water supply was the main source of weakness in the economy, down 1.8% in August. July growth was also revised to -1.1% down from -0.3%.
Jonathan Moyes, Head of Investment Research, Wealth Club said, “The weak August GDP number follows a marked downturn in PMIs over the summer and so this is unlikely to catch the market by surprise.
“It was hard to find many positives in the data, although the construction sector continues to be an area of strength. With a significant tightening of financial conditions through September and October, there is certainly a chill in the air. We expect this release to be a sign of the winter to come.
“The market’s attention will remain firmly fixed on both the Chancellor and the Bank of England as they look to restore confidence and stabilise the government bond market.
“With inflation remaining high, the bank is unlikely to see weak GDP as cause for softening policy. The government on the other hand is clearly looking to stave off a severe recession with loose fiscal policy. We look forward to the detail on how this will be funded on 31 October.”