“Households are beginning to feel the impact of slowing real wage growth, with higher costs, particularly for essentials such as food, offset by smaller nominal wage rises. The labour market has also weakened, with unemployment rising in recent months. This could see precautionary savings remaining elevated, with concerns over employment prospects becoming more pronounced.
“Government spending was a key driver of growth in the first half of the year, but that is set to slow. Additionally, uncertainty around the composition of any potential tax rises, alongside the timing of the Budget in late November, is expected to weigh on activity for both households and businesses. As a result, we anticipate growth to remain sluggish over the coming months.
"The UK economy returned to growth in August, with GDP rising by 0.1%. Activity during the month was supported by a pickup in the manufacturing sector, which expanded by 0.7%. We expect GDP growth in Q3 to have increased by around 0.1%, a marked slowdown from the 0.3% recorded in Q2.”
