The UK economy reported surprise growth in August on the back of strong factory production, according to official figures released today.

Nevertheless, it represented a slowdown after stronger activity earlier in the summer.

The Office for National Statistics (ONS) reported that gross domestic product (GDP) increased by 0.1 per cent in August, following 0.4 per cent growth in July.

The statistics body also said the economy grew by 0.4 per cent in June, revising its previous prediction of 0.3 per cent upwards.

The August reading surpassed the expectations of economists, who had pointed to a 0.1 per cent decline for the month.

Data showed that the economy grew by 0.7 per cent over the three months to August.

This followed a growth of 0.5 per cent in the three months to July, and a growth of 0.5 per cent in the three months to June. 

It comes ahead of Chancellor John Healey delivering the Budget on October 28.

Mr Healey, who is in Bangkok for a meeting of the IMF, said:  Despite conflicts in the Middle East and Europe hitting people across the world, today’s figures offer more proof of Britain’s resilience in the face of these global shocks.

‘Today, I’m discussing with international finance ministers what we can do to limit the impact of global events on the UK.’

Chancellor John Healey will deliver the Budget in two weeks’ time on October 28

The August reading suggests resilience in the UK economy despite pressure on consumer spending and wider volatility in the global economy due to the conflict in the Middle East.

Growth in August was significantly driven by the production sector, which grew by 0.8 per cent for the month – the fastest rate for nine months.

The ONS said that this was partly driven by growth in the manufacturing sector, which lifted by 1.2 per cent due to a boost from the pharmaceutical sector.

Meanwhile, the key services sector was flat for August following strong growth in the previous two months.

Experts highlighted strength in the sale of motor vehicles, but reported a 2.7 per cent monthly decline for bars and restaurants.

The construction sector also declined further, with a 0.2 per cent fall for August amid pressure from high mortgage rates.

ONS director of economic statistics Liz McKeown said: ‘GDP growth showed further strength in the latest three months, led by the services sector, while both production and construction fell. 

‘Upward revisions to already strong services growth in June and July helped drive robust growth across the three months, despite services showing no growth in August.

‘Computer programming was once again the largest contributor to growth in the three months to August. 

‘Looking at a longer-term picture, compared with the same three-month period a year ago, the increased strength now seen in services is evident not just in computer programming but across a range of business-facing industries, including legal services, research and development and advertising.’