Understand
UK economic growth exceeds expectations despite higher energy costs
Overview
The UK economy grew faster than anticipated in August, showing robust performance despite higher energy costs linked to conflicts and international shocks. Gross domestic product (GDP) measures economic activity across output, expenditure, and income, serving as a primary indicator for government decisions, taxation, and public services. While the IMF recently upgraded its UK growth forecast for the year to 1.3%, economists expect growth to remain resilient but slow as households and businesses continue adjusting to higher prices.
Key points
- The UK economy grew by 0.1% in August, outperforming analysts' predictions of a slight contraction.
- Gross domestic product (GDP) measures a country's economic activity through output, expenditure, and income.
- A recession is defined as a fall in GDP for two consecutive quarters.
- The IMF upgraded its UK growth forecast to 1.3% expansion for the year, noting resilience against global energy shocks.
- GDP has limitations, as it excludes unpaid work, inequality, and environmental sustainability, prompting alternative well-being measures by the ONS.