UK Monthly GDP Up Again in Aug But Lost Some Steam

AUG GDP +2.1% M/M (PREV +6.4%), -9.3% Y/Y (PREV -11.3%)

AUG INDEX OF SERVICES +2.4% M/M; -9.5% Y/Y; PRV +5.9% M/M, MED +5.0%

AUG IND PRODUCTION +0.3% M/M, PRV +5.2%, MED +2.6%

AUG MANUFACTURING +0.7% M/M, PRV +6.9%, MEDIAN +3.0%

AUG CONSTRUCTION +3.0% M/M, PRV +17.2%, MEDIAN +5.0%

M/M GDP recovered further in Aug but lost some momentum, ticking up by 2.1% after having risen a revised 6.4% in July. This marks the fourth consecutive increase, but markets were looking for a steeper uptick (BBG: 4.7%). According to the ONS, GDP is still 9.2% below Feb's pre crisis level. The service sector gained 2.4% in Aug, coming in below market forecasts. The improvement in the service sector was mainly driven by accommodation and food service activities, rising by 71.4% m/m and being the largest contributor to growth in Aug. Especially food and beverage services increased significantly due to easing of lockdown measures, staycations and the govt's 'eat out to help out' scheme. While the industrial sector grew 0.3% on the month of Aug, mfg output increased 0.7% mainly due to weak production levels in the car and aircraft industries. Both indices remained below their Feb levels with IP being 6.0% below, while mfg is 8.5% lower than in Feb. The construction sector lost some steam in Aug, edging up only 3.0% after posting growth rates in the double digits for two consecutive months. However, there was a sharp boost from housebuilding in Aug.