UK GDP rebounded slightly in August and markets are betting the central bank will hold fire in November

　　The UK (GBR) economy rebounded slightly in August after a sharp decline in July, but the overall picture remains on a slow growth trend.

　　Data from the Office for National Statistics (ONS) showed GDP rose 0.2% in August on a monthly basis, matching forecasts from a Reuters poll of economists. The recovery partly reflects the absence of factors that held back economic activity in July.

　　The previous 0.5 per cent decline was revised down to a 0.6 per cent decline as rainy weather and strikes hit the economy.

　　Services grew by 0.4%. However, manufacturing contracted by 0.8 per cent and construction by 0.5 per cent, adding to evidence that the economy is losing momentum amid a sharp rise in borrowing costs.

　　The recession...

　　Analysts said the August GDP increase reduced the chances of a recession starting as early as July to September.

　　In the previous week, the Bank of England (BoE) cut its growth forecast for the July-September period from 0.4 per cent to 0.1 per cent, with little sign of further interest rate rises.

　　But for the third quarter to hold steady, GDP would need to grow by at least 0.2 percent in September. A contraction in the quarter could mean the economy is already in recession.

　　Any disappointing news on UK macro data could reignite recession fears and raise market bets that the Bank of England will maintain the status quo in November.