UK economy 'barely keeps head above water' as GDP scrapes 0.1% growth in August

According to ONS data out this morning, monthly real GDP is estimated to have grown by 0.1% in August 2025, following a revised fall of 0.1% in July 2025 (revised down from no growth in the previous publication).

Production grew by 0.4% in August, whereas services showed no growth and construction fell by 0.3% in August 2025.

Meanwhile, the value of goods exports fell by £1.1 billion (3.3%) in August 2025, with a decrease in exports to both EU and non-EU countries.

Exports of goods to the United States, including precious metals, fell by £0.7 billion in August 2025.

The total goods and services trade deficit widened by £1.7 billion to £5.2 billion in the three months to August 2025, because total exports fell by more than imports.

Samuel Edwards, Head of Dealing at global financial services firm Ebury, said: “The UK economy barely kept its head above water in August, posting growth of a timid 0.1% after July’s revised decline - a figure that should be sounding alarm bells for the Chancellor as the Autumn Budget draws nearer.

Although the IMF has nudged up its UK growth forecast this week, reflecting easing tariff pressures, businesses remain on tenterhooks amid a frail jobs market and Rachel Reeves hinting at further tax hikes.

In fact, we are hearing growing concern from businesses regarding the upcoming Budget. It’s not just about the impact on their profitability, but also about wider market volatility and the potential effects on sterling.

Historically, these periods of fiscal uncertainty tend to drive a ‘GBP sell’ narrative among traders leading up to major fiscal announcements. That’s fuelling an appetite for hedging as businesses look to shield themselves from risk.

As we edge closer to the Budget we would strongly urge businesses - especially SMEs - to limit their exposure to any shocks or market volatility by ensuring ample preparation, access to flexible finance, and implementing robust FX hedging strategies to build resilience to any headwinds.