Recent official figures from the Office for National Statistics (ONS) showed that the UK economy grew modestly in August, which helped to recover from a bigger fall in July following strike action in the education sector. Gross domestic product (GDP) shrank by 0.6% in July, which was more than the initial figure of 0.5% fall. GDP is a measure of all the activity of companies, individuals, and governments in the country. It is also a measure of the health of the UK economy. If GDP is falling, it means the economy is shrinking, leaving businesses in a tough spot. The UK has been able to avoid recession, but the country’s economy remains trapped in a low-growth and high tax cycle that’s leaving working people worse off.
The ONS showed the UK economy’s contribution over the past three months has been modest, with car manufacturing and sales, as well as construction, boosting the overall figures. Director of economic statistics at the ONS, Darren Morgan, revealed that computer programmers and engineers also contributed to August’s readings, as well as education. In contrast, arts, entertainment, recreation, sports, and amusement activities had fallen more than 10% in August. Morgan explained that the reason the services sector was the primary contributor to August’s 0.2% growth was that the period was relatively quiet compared to past months, where several factors impacted the economy.
Chancellor Jeremy Hunt responded positively to the ONS’s latest data, stating that the economy “is more resilient than expected.” However, the country’s shadow chancellor Rachel Reeves saw things differently, calling the UK’s economy “a low growth, high tax cycle that is leaving working people worse off.” Yael Selfin, chief economist at KPMG UK, shared Reeves’s view, stating, “The UK economy continues to feel the strain from elevated prices and high interest rates, with the full impact of past tightening still to be felt.”
The figures also showed that the education sector’s contribution to the economy over the year as a whole was measured by the ONS. Although schools are on holiday in August, the education sector had helped contribute to August’s figures positively. Despite this, the sectors’ overall performance remained modest, with more cautious celebrations regarding the potential for growth and progress in Britain’s economy
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