Thursday 15 October 2026
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Healey welcomes surprise UK growth as a sign of resilience ahead of first Budget

Chancellor promises cost-of-living relief while vowing to keep spending under control

By LineZotpaper
Published
Read Time2 min
Sources2 outlets
The UK economy grew by 0.1% in August, defying analyst forecasts of a slight contraction, and Chancellor John Healey has called the performance a sign of resilience while promising to ease cost of living and business pressures in his first Budget in two weeks.

Official figures from the Office for National Statistics showed the economy expanded by 0.1% in August against expectations of a small decline, and by 0.7% in the three months to August. Healey told the BBC the result was "a sign of resilience in the UK economy that some had not expected," adding that "it's really tough in the face of these economic global shocks."

The growth was driven by increased production, including manufacturing, oil and gas extraction and energy supply. The services sector, the largest part of the UK economy, was flat during the month, while construction contracted.

The figures follow an upgrade to this year's forecast for the UK economy from the International Monetary Fund earlier this week. Healey said the growth reflected "part of the discipline the IMF here in Bangkok this week has endorsed that they see in Britain."

Ahead of his first Budget, due in two weeks, Healey said he wanted "to give people a bit of breathing space from the cost of living and cost of business pressures." He did not detail specific measures, saying "where we can take action, we will," but insisted the government would maintain fiscal discipline: "where we want to do things we have to make sure we can pay for them within the Budget that we've got and control spending."

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Analysis

Why This Matters

  • The data gives the government a more positive economic backdrop than expected just before its first Budget, where it has promised action on cost of living and business costs.
  • Healey has tied the growth figure to his fiscal discipline message, which will shape how much headroom he claims for new spending.
  • The mixed sector breakdown means the headline growth may not reflect the experience of services firms and construction, which are key parts of the economy.

Background

Healey is preparing to deliver his first Budget in two weeks at a time when the UK economy is facing what he describes as global shocks. The IMF upgraded its UK growth forecast earlier this week, providing some external validation for the government's approach. The August growth figure is the latest in a series of monthly output readings that will inform the Budget arithmetic.

Key Perspectives

John Healey, Chancellor: He presents the growth as evidence of resilience and as an endorsement of the government's fiscal discipline, while promising to help households and businesses where affordable action is possible. ONS data and forecasters: The figure beat analyst predictions of a slight contraction, but services were flat and construction shrank, pointing to an uneven recovery rather than broad-based strength. Sceptics: They may question whether one month of modest growth is durable, and note that the chancellor's insistence on controlling spending could limit the scale of the relief he is able to deliver in the Budget.

What to Watch

  • The Budget statement in two weeks, and whether it contains specific measures to reduce cost of living and business pressures.
  • Future monthly GDP readings, particularly services and construction output, to see if the August growth is sustained.
  • Any further IMF commentary on the UK outlook, given the watchdog's upgrade earlier this week.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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