UK economy grew slightly in August ahead of key Budget

The main driver of economic growth in August was the manufacturing sector, which grew by 0.7%.

However, the key services sector - which covers businesses in sectors such as retail, hospitality and finance - saw no growth during the month.

Monthly growth figures can be volatile, as seen by the downgrade for July, and the ONS is focusing on growth over a rolling three-month period.

In the three months to August the economy expanded by 0.3%, which was a small improvement on the 0.2% growth in the three months to July.

"Economic growth increased slightly in the latest three months. Services growth held steady, while there was a smaller drag from production than previously," said Liz McKeown, ONS director of statistics.

Yael Selfin, chief economist at KPMG UK, said that while the economy had returned to growth in August, the "outlook remains weak".

She said households were facing higher costs for essentials such as food, while uncertainty about potential Budget tax rises was "expected to weigh on activity for both households and businesses".

"As a result, we anticipate growth to remain sluggish over the coming months."

Ruth Gregory, deputy chief UK economist at Capital Economics, called August's growth "meagre".

She said the increases in taxes for businesses that took effect in April - such as the rise in employers' National Insurance contributions - were "undoubtedly playing a part in restraining growth".

"There is little reason to think GDP growth will accelerate much from here," she said.

"The disruption to the auto sector caused by the Jaguar Land Rover cyber-attack probably meant the economy went backwards in September."