Following a stagnant July, the UK economy showed growth in August.

According to new figures from the Office for National Statistics (ONS), GDP (gross domestic product), a key measure of economy growth, grew 0.2% month-on-month in August, in line with expectations.

It reflects growth across all three key sectors, as services output increased 0.1% month-on-month, construction output rose 0.4% month-on-month, and production output grew 0.5% month-on-month.

Ben Jones, Lead Economist, CBI, said: “There are some encouraging signs in the latest GDP data, particularly the ongoing recovery in retail, but growth remains uneven across sectors and momentum in the economy is a little weaker than was expected a few months ago.

“Our surveys suggest that businesses may have tapped the brakes again in September amid speculation over potential Budget announcements.

“Anecdotally it’s clear that some firms have paused hiring and investment decisions pending more clarity over the direction of the new government’s economic policies.

“With the Chancellor’s first Budget only weeks away, the government has an opportunity to build momentum behind the economic recovery by demonstrating it has a credible plan for boosting the country’s growth trajectory.

“This should include measures to support productivity and business investment, such as adding flexibility to Apprenticeship Levy funded courses and outlining an ambitious Net Zero Investment Plan that includes green tax incentives.

“It must also make the UK’s business environment more attractive to firms at home and abroad by providing them with certainty and clarity via a Business Tax Roadmap.”