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The UK economy expanded by 0.1% in August, according to official figures, giving a lift to Rachel Reeves ahead of next month’s crucial budget.

After the economy flatlined in July, the Office for National Statistics said gross domestic product had improved the following month. It keeps the UK on track to being one of the fastest-growing major economies this year.

The chancellor is weighing up raising funds from a series of tax rises in her 26 November budget to close a £20bn to £30bn budget spending gap that has opened up this year.

A Reuters poll of City economists expected a return to modest growth based mainly on a recovery in the manufacturing sector.

Inflation is forecast to begin easing before the end of the year and the Bank of England is expected to make further interest rate cuts in 2026, easing the pressure on household incomes.

More details to follow …