October 16, 2025.
Economic update from the Office for National Statistics (ONS) revealed that UK monthly real GDP is estimated to have grown by 0.1% in August 2025, following a revised fall of 0.1% in July 2025.
On Thursday after UK gross domestic product, GDP, data for August came in line with market expectations the British pound became stable at $1.34
Compared with the same three months to August in 2024, production grew by 0.4% in August, whereas services showed no growth and construction fell by 0.3% in August 2025. Over the longer term, GDP is estimated to have grown by 1.5% in the three months to August 2025.
The statistics office reported that over this period, services grew by 1.8%, construction grew by 1.3%, and production fell by 0.4%. GDP is estimated to be 1.3% higher in August 2025, compared with the same month a year ago.
UK services output is estimated to have experienced no growth in August 2025. This is the second consecutive month in which services have shown no growth, after also doing so in July 2025 7 of the 14 subsectors showed growth in August 2025, ONS stated in the report
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The largest positive contribution to services growth in August 2025 came from administrative and support service activities, which grew by 1.0%, caused by a 5.3% increase in rental and leasing activities.
ONS stated that this subsector saw its largest period of growth since July 2020. It has now grown for the last nine consecutive months, in line with widespread growth in this industry.
The economic data provides relief to Finance Minister Rachel Reeves ahead of the government’s November 26 budget. Reeves has said she is looking at “further measures on tax” ahead of next month’s Budget, in the clearest sign yet that tax hikes are on the way.
The chancellor also said she was considering further measures on public spending in a bid to put the UK’s finances on a firmer footing.
Speaking to broadcasters ahead of an international finance summit in the US, she added that she would “continue to prioritise economic and fiscal stability”.
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The chancellor is widely expected to raise taxes at the budget on 26 November, after gloomy economic forecasts and a series of U-turns on welfare cuts made it harder for her to meet her own tax and spending rules.
BBC reported that Reeves announced tax rises worth £40bn a year at her first Budget last November, including hikes to payroll taxes paid by employers, and insisted she would not have to repeat the move in subsequent years.
FX traders increased bets on Bank of England rate cuts next year, even as the IMF cautioned that inflation is expected to remain the highest in the G7 through 2026, advising the BoE to proceed carefully.
Real GDP grew by 0.3% in the three months to August 2025 compared with the three months to May 2025, a slight increase following growth of 0.2% in the three months to July 2025.
Services output grew by 0.4% in the three months to August 2025, compared with the three months to May 2025; this is unchanged after also growing by 0.4% in the three months to July 2025.
Production output fell by 0.3% in the three months to August 2025, compared with the three months to May 2025; this is a smaller decrease than in the three months to July 2025, when it fell by 1.4% (revised down from a fall of 1.3% in our previous publication).
Construction output increased by 0.3% in the three months to August 2025, compared with the three months to May 2025, a smaller increase than the growth of 0.5% in the three months to July 2025.
