London Daily

Focus on the big picture.
Wednesday, May 13, 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
The Great Western Exit: Why Best Citizens Are Fleeing the Rich World [PODCAST]
The New Robber Barons of Intelligence: Are AI Bosses More Powerful Than Rockefeller?
The End of the Old Order [Podcast]
Britain’s Democracy Is Now a Costume
The AI Gold Rush Is Coming for America’s Last Open Spaces [Podcast]
The Pentagon’s AI Squeeze: Eight Tech Giants Get In, Anthropic Gets Shut Out [Podcast]
The War Map: Professor Jiang’s Dark Theory of Iran, Trump, China, Russia, Israel, and the Coming Global Shock [Podcast]
Labour Is No Longer a National Party [Podcast]
AI Isn’t Stealing Your Job. It’s Dismantling It Piece by Piece.
Lawyers vs Engineers: Why China Builds While America Litigates [Podcast]
Churchill’s Glass: The Drunk, the Doctor, and the Myth Britain Refuses to Sober Up From
Apple issues an unusual warning: this is how your iPhone can be hacked without you doing anything
Kennedy’s Quiet War on Antidepressants Sparks Alarm Across America’s Medical Establishment
The Met Gala Meets the Age of Billionaire Backlash
Russian Oligarch’s Superyacht Crosses Hormuz via Iran-Controlled Route
Gunfire Disrupts White House Correspondents’ Dinner as Trump Is Evacuated
A Leak, a King, and a Fracturing Alliance
Inside the Gates Foundation Turmoil: Layoffs, Scrutiny, and the Cost of Reputational Risk
UK Biobank Breach Exposes Health Data of 500,000, Listed for Sale on Chinese Platform
KPMG Cuts Around 10% of US Audit Partners After Failed Exit Push
French Police Probe Suspected Weather-Data Tampering After Unusual Polymarket Bets on Paris Temperatures
CATL Unveils Revolutionary EV Battery Tech: 1000 km Range and 7-Minute Charging Ahead of Beijing Auto Show
Crypto Scammers Capitalize on Maritime Chaos Near the Strait of Hormuz: A Rising Threat to Shipping Companies
Changi Airport: How Singapore Engineered the World’s Most Efficient Travel Experience
Power Dynamics: Apple’s Leadership Shakeup, Geopolitical Risks in the Strait of Hormuz, and Europe's Energy Strategy Amidst Global Challenges
Apple's Leadership Transition: Can New CEO John Ternus Navigate AI Challenges and Geopolitical Pressures?
Italy’s €100K Tax Gambit: Europe’s Soft Power Tax Haven
News Roundup
Microsoft lost 2.5 millions users (French government) to Linux
Privacy Problems in Microsoft Windows OS
News roundup
Péter András Magyar and the Strategic Reset of Hungary
Hungary After the Landslide — A Strategic Reset in Europe
Meghan Markle Plans Exclusive Women-Focused Retreat During Australia Visit
Starmer and Trump Hold Strategic Talks on Securing Strait of Hormuz Amid Rising Tensions
Unofficial Australia Visit by Prince Harry and Meghan Expected to Stir Tensions with Royal Circles
Pipeline Attack Cuts Significant Share of Saudi Arabia’s Oil Export Capacity
UK Stocks Rise on Ceasefire Momentum and Renewed Focus on Diplomacy
UK to Hold Further Strategic Talks on Strait of Hormuz Security
Starmer Voices Frustration as Global Tensions Drive Up UK Energy Costs
UK Students Voice Concern Over Proposal for Automatic Military Draft Registration
Rising Volatility Drives Uncertainty in UK Fuel and Petrol Prices
UK Moves to Deploy ‘Skyhammer’ Anti-Drone System to Strengthen Airspace Defense
New Analysis Explores UK Budget Mechanics in ‘Behind the Blue’ Feature
Man Arrested After Four Die in Channel Crossing Tragedy
UK Tightens Immigration Framework with New Sponsor Rules and Fee Increases
UK Foreign Secretary Highlights Impact of Intensified Strikes in Lebanon
UK Urges Inclusion of Lebanon in US-Iran Ceasefire Framework
UK Stocks Ease as Ceasefire Doubts in Middle East Weigh on Investor Confidence
UK Reassesses Cloud Strategy Amid Criticism Over Limited Support Measures
×