Britain’s economy partially recovered in August after a sharp drop in July but the bigger picture remained one of only sluggish growth after last year’s surge in inflation and 14 back-to-back interest rate hikes by the Bank of England.
The last time the economy shrank by more than that in a month was in June 2022, impacted by a one-off holiday to mark the late Queen Elizabeth’s 70 years on the throne. The data showed consumer-facing services remained more than 4 per cent below their level before the pandemic, with the biggest drag being the home rentals sector which has been hit by rising interest rates and other cost increases.
While July’s output was revised down, monthly growth in June was revised up by 0.2 percentage points to 0.7 per cent. Investors are putting a chance of less than one in four on the BoE resuming its rate hikes after its next scheduled meeting in November.