August GDP data shows consumers feeling the strain
Commenting on ONS data that showed monthly GDP rising by 0.2% in August, following a fall of 0.6% July 2023, Kitty Ussher, Chief Economist at the Institute of Directors, said:
“Following the contraction in July it is reassuring to see economic growth recorded in August meaning that when the previous three months are taken together output has been positive. In part this is due to strikes in the education sector having affected July’s data.
“However, the picture is less rosy when looking at the consumer-facing sectors. Output in consumer-facing services fell by 0.6% in August with discretionary spending on sports and leisure activities being particularly hard hit. This may be because recent interest rate rises are causing households to budget carefully in the face of rising mortgage costs.”