Prime Minister Andy Burnham speaks at the UK parliament. (AFP Photo)
Britain's economy grew unexpectedly in August, official data showed on Oct. 15, in a boost to Finance Minister John Healey ahead of the Labour government's budget update this month.
Gross domestic product rose 0.1 percent in August from the previous month, beating analysts' consensus forecast for a 0.1 percent contraction.
The figure still marked a slowdown from the 0.4 percent expansion recorded in July.
Prime Minister Andy Burnham, who has made easing the cost of living a key focus for his Labour government, has set the stage for difficult decisions to be made in the Oct. 28 budget presentation.
With inflation rising and government bond yields reaching multi-decade highs, Healey, who will unveil the budget, has pledged to maintain strict fiscal discipline.
But he has not been drawn on whether his budget will include new tax rises to help reduce Britain's debt pile.
Analysts expect U.K. inflation to rise towards the end of the year as higher oil and gas prices feed through to household bills, with little sign of an end to the Middle East war.
"We still expect the coming rise in inflation to dampen growth, but the economy is more robust than we thought," said Paul Dales, chief U.K. economist at Capital Economics.
