FAMILIES and businesses need an investment budget, the TUC said today as Britain’s economy grew for the first time in two months.

The Office for National Statistics (ONS) said gross domestic product (GDP) recorded 0.2 per cent growth in August, up from no growth in June or July.

It is the first sign of relief after a period of economic flatlining since the general election.

ONS director of economic statistics Liz McKeown said that while all main sectors of the economy grew, the “broader picture” showed slowing growth in recent months compared with the first half of the year.

The stats come as Chancellor Rachel Reeves prepares to reveal the Labour government’s first Budget this month.

Ms Reeves said the figures were “welcome news,” adding that economic growth was the “number one priority of this government so we can fix the NHS, rebuild Britain, and make working people better off.

“While change will not happen overnight, we are not wasting any time on delivering on the promise of change,” she said.

Both Ms Reeves and Prime Minister Sir Keir Starmer have warned the Budget will feature “tough decisions” from the government.

TUC general secretary Paul Nowak said: “The government inherited a stagnant economy with living standards, growth and investment in the doldrums. 

“Everyone can see the problems the Tories left behind — skills shortages, crumbling public services and a record number of people out of work with ill health. 

“Families and businesses need a fresh start.”

Mr Nowak said the upcoming Budget was “an opportunity to turn the page and unleash a new era of growth.

“The Chancellor can deliver the capital investment that will help us repair and rebuild this country,” he said.