According to the Office for National Statistics, gross domestic product grew 0.2% during the month, following a 0.6% dip in July — revised down from a 0.5% fall — when wet weather and continued industrial action dented activity.
Output in the services sector rose by 0.4% last month and was the only positive contributing sector to the growth in monthly GDP. Production output fell by 0.7% and construction output dropped 0.5%.
In the three months to August, GDP increased by 0.3% when compared with the three months to May 2023, with growth in all sectors.
UK GDP sags by 0.5% in July as recession looms 'around the corner'
Chancellor of the Exchequer Jeremy Hunt said: "The UK has grown faster than France and Germany since the pandemic and today's data shows the economy is more resilient than expected. While this is a good sign, we still need to tackle inflation so we can unlock sustainable growth."
Richard Carter, head of fixed interest research at Quilter Cheviot, said this morning's UK GDP figure provides "another small glimmer of hope" that the UK could scrape through and avoid a recession this year.
"Just this week the IMF predicted that the UK would be the slowest growing economy across the G7 next year, and though 2024 may prove more difficult, this morning's figure provides some relief that though economic growth is challenging, it is not yet non-existent for the UK," he said.
Bank of England holds rates at 5.25% in 5-4 split vote
Carter noted that although the economy is holding up for now, whether or not the UK truly manages to avoid a recession "is yet to be seen", given the lag effect of the Bank of England's rate rises.
"The speed of interest rate rises and the impact of the cost-of-living crisis may mean the pain is simply delayed, and 2024 could prove considerably more difficult," he said.
Meanwhile, Neil Birrell, chief investment officer at Premier Miton Investors, said recessionary risk "remains real", but argued the damage that could be done by ongoing high inflation is a "threat".