Healey says surprise UK growth is 'sign of resilience' ahead of Budget

Breaking news from the markets: Healey says surprise UK growth is 'sign of resilience' ahead of Budget Figure caption, Challenge now is to safeguard UK economy's resilience, says chancellorByArchie MitchellBusiness reporterPublished15 October 2026The UK economy's stronger than expected performance in August has been called a "sign of resilience" by Chancellor John Healey. Healey told the "it's really tough in the face of these economic global shocks" as the latest official figures showed the economy grew by 0. 1% for the month, defying analysts' forecasts of a slight contraction.

It follows an upgrade to this year's forecast for the UK economy from global watchdog the International Monetary Fund (IMF) earlier this week. Mr Healey said he wanted "to give people a bit of breathing space from the cost of living and cost of business pressures", promising to do so when he delivers his first Budget in two weeks' time. Healey did not elaborate on what measures he will take in the Budget, but promised "where we can take action, we will".

Economic Details

But, vowing to keep up the government's approach to fiscal discipline, Healey said "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". The latest figures from the Office for National Statistics showed the economy grew by 0. 7% in the three months to August.

"It's a sign of resilience in the UK economy that some had not expected," Healey said. The chancellor said the growth was "part of the discipline the IMF here in Bangkok this week has endorsed that they see in Britain". Britain's economy was boosted in August by an increase in production, which includes manufacturing, oil and gas extraction and energy supply.

The services industry, which makes up the largest chunk of the UK's economy, was flat during the month, while the construction sector contracted. Over the three months to August, the UK's economy grew by 0. ONS director of economic statistics Liz McKeown said computer programming had been the biggest contributor to what she described as "robust" growth over the period.

Analyst Views

But she said the production and construction sectors shrank over the three-month period. August's surprise expansion follows growth of 0. The ONS also upgraded its estimate for June's monthly growth to 0.

Paul Dales, chief UK economist at Capital Economics, said Britain's economy was "more robust than we thought". He warned that an expected increase in inflation would still "dampen growth", but added that the economy was showing "remarkable resilience to higher energy prices and borrowing costs". PwC senior economist Jake Finney said the development of AI infrastructure was underpinning Britain's relatively strong performance.

"The UK still lags the US in both the scale of that investment and the boost it provides to growth, but it is making progress and remains ahead of many of its European peers," he added. What's happening to the UK economy and how does it affect you?

Financial markets are tracking the development closely as investors assess the likely impact.