UK GDP rose 0.4% in August, Tilney Smith & Williamson comments on the data

06 October 2021

Sarah Giarrusso, Investment Strategist at Tilney Smith & Williamson, the wealth management and professional services group, comments on August UK GDP:

"UK real monthly GDP rose 0.4% in August relative to consensus expectations of 0.5%. This follows a disappointing figure of just 0.1% last month which has been revised down to a 0.1% fall. The 3-month over 3-month rate was 2.9%. Services sector printed a 0.3% monthly rise which was slightly below expectations, whereas the year-on-year figure came in above expectations at 7.3%. Industrial production slowed to just 0.8% compared to the previous month’s 1.2%, however did beat expectations of just a 0.2% increase.    

"The rebound in the monthly GDP figures is welcome confirmation that the UK economy continues its recovery. As we move through the ‘post-pandemic’ re-opening period, challenges continue to arrive, supply chain disruptions have been a hindrance to the industrial sector, where output remains constrained. However, as vaccination rates are high and restrictions have been lifted, the boost to services has offset the lower level of industrial production. Yesterday’s official labour market report also reflected this growing economic strength – according to the PAYE payroll-based measure of employment, the UK has added more jobs than were lost due to the pandemic. Job vacancies remain at record highs and the unemployment rate at 4.5%. 

"However, the UK does still face headwinds, such as labour shortages and supply chain disruption which could lead to higher, stickier inflation. Despite this, consensus forecasts for 2021 and 2022 annualised real GDP remain firmly in expansionary territory at 7.0% and 5.3% respectively. We expect the UK economy to continue its recovery and the environment to remain conducive for equities to outperform bonds."


About Tilney Smith & Williamson

Tilney Smith & Williamson is the UK’s leading integrated wealth management and professional services group, created by the merger of Tilney and Smith & Williamson on 1 September 2020. With £54.8 billion of assets under management (as at 30 June 2021), it ranks as the third largest UK wealth manager measured by revenues and the eighth largest professional services firm ranked by fee income. The Group currently operates through three principal brands: Tilney, Smith & Williamson and online investment service Bestinvest. It has a network of 28 offices across the UK, as well as the Republic of Ireland and the Channel Islands. Through its operating companies, the Group offers an extensive range of financial and professional services to individuals, family trusts, professional intermediaries, charities and businesses. It is uniquely well-placed to support clients with both their personal financial affairs and their business interests. Tilney Smith & Williamson’s personal wealth management services include financial planning, investment management and advice, online execution-only investing and personal tax advice. For businesses, its wide range of services includes assurance and accounting, business tax advice, employee benefits, forensic advice, fund administration, recovery and restructuring and transaction services.