The UK economy grew slightly in August, according to the latest official figures.

The economy expanded by 0.1%, the Office for National Statistics said, after contracting by 0.1% in July.

The government has made boosting the economy a key priority and pressure is mounting ahead of the Budget next month.

Many economists have been warning that tax rises or spending cuts will be needed to meet the chancellor’s self-imposed borrowing rules.

The Institute for Fiscal Studies is projecting Rachel Reeves will need to find £22bn to make up a shortfall in the government’s finances, and will “almost certainly” have to raise taxes.

On Wednesday, Reeves said she was “looking at further measures on tax and spending, to make sure that the public finances always add up”.

The monthly growth figures can be volatile, and ONS has downgraded July’s figure from zero growth to a 0.1% contraction.

The ONS is focusing on growth over a rolling three-month period, and in the three months to August the economy expanded by 0.3% which was a slight improvement on the previous figure.

“Economic growth increased slightly in the latest three months. Services growth held steady, while there was a smaller drag from production than previously,” said Liz McKeown, ONS director of statistics.

“Continued strength in business rental and leasing and healthcare were the main contributors to services growth, partially offset by weakness in some consumer facing services, while wholesalers also fared poorly.”