UK Growth offers little relief for households

Lale Akoner, global market analyst, says: “August’s 0.1% GDP growth may technically keep the UK economy out of contraction, but it offers little comfort for consumers still feeling the pinch. The uptick was driven by manufacturing, while the dominant services sector flatlined, a sign that everyday activity remains subdued. For households, that means the cost-of-living squeeze is far from over, with pay growth slowing and inflation still above target.

“The figures also highlight the challenge facing Chancellor Rachel Reeves ahead of next month’s budget. While modest growth helps, the government’s fiscal position remains tight; Reeves may need a £50 billion buffer to avoid future tax rises or spending cuts. For investors, this means little room for fiscal giveaways and continued pressure on sentiment-sensitive assets like the pound and retail stocks.”