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UK economy expected to have shrunk in August, forecasts differ on size of fall

Economists expect official GDP data due on Thursday 15 October to show the UK economy shrank in August after strong growth in June and July. Outlets differ on how large Pantheon's forecast fall is: 0.3% or 0.1%.

2 outlets · 0L · 1C · 1R First reported Account updated
Image: Evening Standard
Image: City A.M.

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The story, neutrally told

Mixed · 2The UK economy is forecast to have shrunk in August, after stronger-than-expected growth in June and July, according to economists quoted by the Evening Standard and City A.M. Centre · 1The Office for National Statistics is due to publish the monthly GDP figures on Thursday 15 October. Mixed · 2The economy grew 0.3% in June, helped by hospitality and leisure firms, and by 0.4% in July, when services were boosted by AI use; the Standard says the service sector rose 0.6% in July.

Mixed · 2Robert Wood, chief UK economist at Pantheon Macroeconomics, expects weaker output across all the main parts of the economy, with professional services, administration, and information and communication showing notable weakness. Mixed · 2The two outlets give different figures for Wood's forecast: the Evening Standard reports a 0.3% decline, while City A.M. reports a 0.1% decline. Mixed · 2Wood said these 'big three services', which together make up 19.7% of GDP, had a 'stonking July' with their strongest monthly growth since April 2022, and that the crucial question for August is how much of that surge has unwound.

Mixed · 2Thomas Pugh, chief economist at RSM, forecasts a 0.1% fall in August, according to City A.M.; the Standard also reports he expects third-quarter growth of 0.4% to 0.5% and says the weaker month should not 'obscure the broader trend of resilience'. Right · 1City A.M. adds that a Bloomberg poll of City economists points to a 0.1% contraction. Mixed · 2Pugh said the outlook beyond the summer is 'more difficult': he expects inflation to rise to around 4.5% early next year, unemployment to trend back above 5%, and the Budget to add uncertainty, slowing growth sharply in the final quarter and into early 2027.

Mixed · 2Both outlets say experts think the positive start to Andy Burnham's time as Prime Minister has probably stumbled in the data; City A.M. adds that a shrinking economy will pressure Chancellor John Healey, who faces difficult decisions at this month's Budget. Right · 1City A.M. also reports that economists say rising inflation could lead the Bank of England to raise rates as many as four times by next summer, and that Oxford Economics called a November hike 'ever more certain'.

Every sentence links to the reporting it rests on. The pill in front of each says where its sources sit: Left, Centre or Right when one side supplies at least half of them, Mixed when they are evenly split. The number is how many outlets it cites.

Left0 outlets

No left outlet in our sources has covered this story yet.

Centre1 outlet

Framing
Data-led preview of the GDP release, framed as a 'correction' after a strong summer, with Pugh's resilience view alongside.
Emphasis
Sector detail, Wood's 0.3% fall forecast, and Pugh's Q3 growth forecast of 0.4-0.5%.
Leaves out or plays down
Does not mention the Chancellor, the Bloomberg poll or Bank of England rate expectations.
Charged language
“correction”“stonking”
For example
“Economists have said the economy is likely to have contracted in August in a “correction”” — Evening Standard

Right1 outlet

Framing
Presents the data as political and fiscal pressure on the government ahead of the Budget, with a 'difficult' outlook.
Emphasis
Pressure on Chancellor John Healey, the Bloomberg consensus, and possible Bank of England rate rises.
Leaves out or plays down
Leaves out Pugh's forecast of 0.4-0.5% third-quarter growth and the 'resilience' point; gives a smaller fall for Wood than the Standard.
Charged language
“pile further pressure”“difficult decisions”
For example
“signs of a shrinking economy will pile further pressure on Chancellor John Healey” — City A.M.