UK economy sees surprise growth in August ahead of Budget

The UK economy grew by 0.1% in August, driven largely by increases in production including manufacturing and energy supply. This better-than-expected performance follows a 0.4% growth in July and brings the three-month growth rate to 0.7%, supported notably by computer programming.

Chancellor John Healey welcomed the figures while attending the IMF meetings in Bangkok, where global watchdogs praised the UK's growth prospects and debt-reduction plans. Healey now faces the challenge of delivering a balanced Budget later this month without increasing borrowing.