The UK economy grows by 0.2% due to the performance of the services sector.

• The UK economy grew by 0.2% in August, marking a recovery from the 0.6% decline in July.

• The output of the service sector increased by 0.4%, contributing positively to the overall economy.

• Bank of England Chief Economist Huw Pill will be speaking next.

UK Monthly GDP Estimate

In August, the UK economy expanded by 0.2%, indicating a positive shift from the 0.6% contraction in July and aligning with economists' forecasts. Although growth was expected, concerns were raised about the potential negative impact of industrial and manufacturing production.

Service Sector Output The service sector showed a 0.4% increase in output, contributing to overall economic recovery. However, consumer-facing services experienced a 0.6% decline in output, and in the industrial sector, both production and manufacturing decreased.

Resilience of the UK Economy Despite challenges in various sectors, industrial production saw growth over the three months to August, suggesting a level of resilience in the UK economy. Such resilience might enable the Bank of England to address persistent inflationary pressures by considering rate adjustments.

GBP/USD Reaction

Before and after the release of the UK GDP estimate, the GBP/USD experienced fluctuations, including a rise to $1.23272 post-release. The current GBP/USD sits at $1.23186, demonstrating slight upward movement.

Upcoming Events

The Bank of England's (BoE) Chief Economist Huw Pill is scheduled to speak, potentially impacting the GBP/USD. Meanwhile, the US CPI Report is anticipated to attract attention, with expectations of a slightly softened annual inflation rate and core inflation.

FOMC member Raphael Bostic and other Fed commentary are also important considerations, particularly the potential for a shift from a dovish stance.