"UK Economy Edges Up, But Will It Last?"

UK Economy Edges Up 0.1% in August Ahead of Crucial Budget Decision The UK economy posted a modest 0.1% expansion in August, driven by a 0.7% surge in manufacturing output, according to official figures released by the Office for National Statistics (ONS). The slight uptick comes as economists warn that tax hikes or spending cuts are likely to be necessary to meet the government's borrowing targets. The ONS data showed that the economy expanded by 0.1% in August, following a revised contraction of 0.1% in July. The manufacturing sector was the main driver of growth, with output increasing by 0.7%. However, other sectors such as services and construction remained sluggish, contributing to the overall fragile state of the economy. According to economists, the government's self-imposed borrowing rule is a major concern. Many analysts expect that tax rises or spending cuts will be needed to meet this target, with some projecting a £22bn shortfall. "The data suggests that growth remains fragile and vulnerable to external shocks," said an economist at a leading financial institution. The Chancellor, Rachel Reeves, is set to unveil her fiscal plans in the upcoming Budget next month. The government has made boosting the economy a priority, but economists predict that growth will remain sluggish due to people waiting to see what measures the chancellor announces. "We need to see bold action from the government to stimulate growth and create jobs," said a leading business leader. The UK's economic performance is closely watched by investors and policymakers around the world. The country's economy has been struggling since the COVID-19 pandemic, and recent data suggests that it remains vulnerable to external shocks. As the Chancellor prepares to unveil her fiscal plans, the data suggests that growth will remain a major concern for the government. In conclusion, the UK economy's modest 0.1% expansion in August is a mixed signal ahead of next month's Budget. While manufacturing output showed signs of improvement, other sectors remained sluggish, and economists warn that tax hikes or spending cuts may be necessary to meet the government's borrowing targets. The Chancellor's fiscal plans will be closely watched by investors and policymakers around the world. Sources: - Office for National Statistics (ONS) - BBC Business - Leading financial institutions and business leaders This story was compiled from reports by BBC Business and BBC Business.