The UK 10-year gilt yield slipped below 5.35%, the lowest in three weeks, due to renewed appetite for government bonds amid a global equity selloff. At the same time, the latest data showed GDP expanded by 0.1% in August, following a 0.4% increase in July, avoiding forecasts of a contraction. Output also grew 0.7% over the three months to August, marking a fourth consecutive month in which growth exceeded expectations. The resilience of the economy, despite elevated energy costs and borrowing expenses, has drawn attention from Bank of England policymakers and could strengthen the argument for another interest-rate increase next month to contain inflation risks linked to the Iran war. The figures come ahead of Chancellor John Healey’s first budget on October 28. Although stronger activity could prompt an upgrade to the UK’s growth outlook, rising gilt yields and pressure to support households leave the government with limited fiscal flexibility.