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The UK economy grew 0.2 per cent in August following two months of stagnation, driven by expansion in the services, manufacturing and construction sectors.
The rise matched the expectations of economists polled by Reuters.
Services output grew by 0.1 per cent, manufacturing was up 0.5 per cent and construction expanded 0.4 per cent, according to figures published by the Office for National Statistics on Friday.
The data comes less than three weeks before Labour’s first Budget, when chancellor Rachel Reeves faces the challenge of lifting economic growth while repairing the public finances.
Prime Minister Sir Keir Starmer and Reeves have put growth at the heart of Labour’s agenda, but have warned the public that the Budget on October 30 will include “painful” choices.
“All main sectors of the economy grew in August, but the broader picture is one of slowing growth in recent months, compared to the first half of the year,” said Liz McKeown, director of economic statistics at the ONS.
The economy entered a technical recession at the end of last year, but returned to growth at the start of this year as price pressures eased and mortgage rates fell.
However, signs that growth will slow in the second half of the year and falling inflation prompted the Bank of England to cut interest rates in August.
The BoE held interest rates at 5 per cent last month but indicated it may cut borrowing costs as soon as November.
“It’s welcome news that growth has returned to the economy,” Reeves said. “Growing the economy is the number one priority of this government so we can fix the NHS, rebuild Britain and make working people better off.”