The UK economy recorded slight growth in August, expanding by 0.1%, according to figures released by the Office for National Statistics (ONS). This uptick was primarily driven by a rise in manufacturing output, which increased by 0.7%. The wider services sector, however, including retail, hospitality and finance, showed no growth during the month, underscoring fragility in the broader economy. Meanwhile, the ONS revised its July GDP estimate downward, showing a contraction of 0.1% rather than the previously reported flat growth. The figures come at a time of heightened focus on next month’s Budget announcement, where expectations are mounting on whether Chancellor Rachel Reeves may introduce tax increases or spending cuts to meet the Government’s fiscal rules. Economists suspect the Chancellor will need to find roughly £22 billion to bring borrowing in line with her stated targets. Many are calling for the Government to take a bold approach, calling for a financial buffer to avoid deeper cuts or further tax rises in the future. Despite weak growth figures, the Bank of England is not expected to lower interest rates in its upcoming meeting, given UK inflation remains high at 3.8%. By contrast, it was predicted this week that the UK will be the second fastest-growing economy in the G7 this year. However, the same report warned that Britain is likely to experience the highest inflation among G7 countries in both this year and last, driven largely by rising energy and utility prices. With economic performance remaining uneven and inflation persistently high, the upcoming Budget is set to play a crucial role in determining the UK’s fiscal and economic path through the end of the year and beyond.