London Daily

Focus on the big picture.
Saturday, Feb 21, 2026

UK set to avoid recession despite poor August

UK set to avoid recession despite poor August

The economy contracted in August, but is still expected to have grown in the third quarter.

The UK's economy is expected to avoid a recession after showing better-than-expected growth in the three months to the end of August.

The Office for National Statistics said the economy would now have to shrink sharply in September for the third quarter to show an overall contraction.

In three months, the economy grew by 0.3% as weak manufacturing was offset by buoyant TV and film production.

Even so, the economy unexpectedly shrank in the month of August by 0.1%.


Why the talk about a recession?


The growth figures are being watched closely for signs of recession - defined as two consecutive quarters of contraction - after the economy shrank in the second quarter for the first time since 2012.

The next quarter runs until the end of September so the August data is the second month in the third quarter.


What is the UK's GDP?


Although the economy contracted in August, the ONS revised up its forecast for growth in July from 0.3% to 0.4%.

Andrew Wishart, UK economist at Capital Economics, said that this revision meant "fears that the economy is already in recession have been banished".

The ONS said the economy would now have to contract by 1.5% in September alone for the UK to slide in to recession.

What happened in the latest three months?
The ONS uses the monthly data to compile a rolling three-month picture of GDP.

It said that in the first half of 2019 the data had been volatile because of preparations for the original Brexit date in March, which had sparked some stockpiling.

Rob Kent-Smith, head of GDP at the ONS, said: "Growth increased in the latest three months, despite a weak performance across manufacturing, with TV and film production helping to boost the services sector.

"Services provided [the] majority of the growth over the three months, with production and manufacturing falling back," he said.

Over the three months the services sector - which makes up roughly 80% of GDP - grew by 0.4%, following a period of largely flat growth in the previous three months.

The ONS said the production sector fell by 0.4% in the same period, while construction output grew by 0.1%.


So why did the economy shrink in August?


For August, economists had been expecting zero growth.

But the ONS data showed it contracted, dragged lower by a drop in manufacturing when car production was subdued.

Only the construction sector expanded during the month, said Chris Williamson, chief business economist at IHS Markit.

Manufacturing contracted by 0.7% while the all-important services sector failed to grow.

He described the August data as "disappointing".

Newsletter

Related Articles

0:00
0:00
Close
UK Confirms Preferential U.S. Trading Terms Will Continue After Supreme Court Tariff Ruling
U.S. and U.K. to Hold Talks on Diego Garcia as Iran Objects to Potential Military Use
UK Officials Weigh Possible Changes to Prince Andrew’s Position in Line of Succession Amid Ongoing Scrutiny
British Police Probe Epstein’s UK Airport Links and Expand High-Profile Inquiries
United Kingdom Denies U.S. Access to Military Base for Potential Iran Strike
British Co-founder of ASOS falls to his death from Pattaya apartment
Early 2026 Data Suggests Tentative Recovery for UK Businesses and Households
UK Introduces Digital-First Passport Rules for Dual Citizens in Border Control Overhaul
Unable to Access Live Financial Data for January UK Surplus Report
UK Government Considers Law to Remove Prince Andrew from Royal Line of Succession
UK ‘Working Closely with US’ to Assess Impact of Supreme Court Tariff Ruling
Trump Criticises UK Decision to Restrict Use of Bases in Potential Iran Strike Scenario
UK Foreign Secretary and U.S. State Chief Hold Strategic Talks as Tensions Rise Over Joint Air Base
Two teens arrested in France for alleged terror plot.
Nordic Fracture: How Criminal Scandals and Toxic Ties are Dismantling the Norwegian Crown
US Supreme Court Voids Trump’s Emergency Tariff Plan, Reshaping Trade Power and Fiscal Risk
King Charles III Opens London Fashion Week as Royal Family Faces Fresh Scrutiny
Trump’s Evolving Stance on UK Chagos Islands Deal Draws Renewed Scrutiny
House Democrat Says Former UK Ambassador Unable to Testify in Congressional Epstein Inquiry
No Record of Prince Andrew Arrest in UK as Claims Circulate Online
UK Has Not Granted US Approval to Launch Iran Strikes from RAF Bases, Government Confirms
AI Pricing Pressure Mounts as Chinese Models Undercut US Rivals and Margin Risks Grow
Global Counsel, Advisory Firm Co-Founded by Lord Mandelson, Enters Administration After Client Exodus
London High Court dispute over Ricardo Salinas’s $400mn Elektra share-backed bitcoin loan
UK Intensifies Efforts to Secure Saudi Investment in Next-Generation Fighter Jet Programme
Former Student Files Civil Claim Against UK Authorities After Rape Charges Against Peers Are Dropped
Archer Aviation Chooses Bristol for New UK Engineering Hub to Drive Electric Air Taxi Expansion
UK Sees Surge in Medical Device Testing as Government Pushes Global Competitiveness
UK Competition Watchdog Flags Concerns Over Proposed Getty Images–Shutterstock Merger
Trump Reasserts Opposition to UK Chagos Islands Proposal, Urges Stronger Strategic Alignment
Greek Prime Minister Kyriakos Mitsotakis advocates for a ban on minors using social media.
Liberal Senator Michaelia Cash Accuses Prime Minister of Lying to Australians
Meanwhile in Time Square, NYC One of the most famous landmarks
Jensen Huang just told the story of how Elon Musk became NVIDIA’s very first customer for their powerful AI supercomputer
A Lunar New Year event in Taiwan briefly came to a halt after a temple official standing beside President Lai Ching‑te suddenly vomited, splashing Lai’s clothing
Jillian Michaels reveals Bill Gates’ $55 million investment in mRNA vaccines turned into over $1 billion.
Ex-Prince Andrew Mountbatten-Windsor's arrested
Former British Prince Andrew Arrested on Suspicion of Misconduct in Public Office
Four Chagos Islanders Establish Permanent Settlement on Atoll
Unitree Robotics founder Wang Xingxing showcases future robot deployment during Spring Festival Gala.
UK Inflation Slows Sharply in January, Strengthening Case for Bank of England Rate Cut
Hide the truth, fake the facts, pretend the opposite, Britain is as usual
France President Macron says Free Speech is Bull Sh!t
Viktor Orbán getting massive praise for keeping Hungary safe, rich and migrant-free!
UK Inflation Falls to Ten-Month Low, Markets Anticipate Interest Rate Cut
UK House Prices Climb 2.4% in December as Market Shows Signs of Stabilisation
BAE Systems Predicts Sustained Expansion as Defence Orders Reach Record High
Pro-Palestine Activists Cleared of Burglary Charges Over Break-In at UK Israeli Arms Facility
Former Reform UK Councillors Form New Local Group Amid Party Fragmentation
Reform UK Pledges to Retain Britain’s Budget Watchdog as It Seeks Broader Economic Credibility
×