Sluggish UK economy grows by 0.2% in August - ONS

LONDON, Oct 12 (Reuters) - Britains economy partially recovered in August after a sharp drop in July but the bigger picture remained one of only sluggish growth after last years surge in inflation and 14 back-to-back interest rate hikes by the Bank of England.

Official data showed economic output grew by a 0.2% in August from July, matching the median forecast in a Reuters poll of economists.

But Julys drop, when rainy weather and strikes hit the economy, was estimated to have been bigger than first thought, dropping by 0.6% rather than the initial estimate of 0.5%.

The last time the economy shrank by more than that on a month-on-month basis was in June last year which reflected the impact of a one-off holiday to mark the late Queen Elizabeths 70 years on the throne.

Nonetheless, Augusts growth reduces the possibility of a recession starting as early as the July-September period.

The ONS said the economy would need to grow by 0.2% in September to avoid a contraction in the third quarter, excluding other factors.

The data showed Britains huge services sector grew by a slightly stronger than expected 0.4% in August from July while manufacturing and construction shrank by 0.8% and 0.5%.