SEPT 12 – The UK economy failed to grow in July, according to the latest official figures.
The Office for National Statistics (ONS) said the economy saw zero growth in the month, following a 0.4% expansion in June.
However, monthly figures are volatile, and over the three months to the end of July, the economy grew by 0.2% compared with the previous three months, the ONS said.
The government is under mounting pressure to deliver on its key priority of boosting economic growth ahead of the Budget on 26 November.
The UK’s statistics body said the service sector performed well, helped by the health sector, computer programming and office support services.
However, this was offset by a weak performance in the manufacturing sector.
In the Budget, Chancellor Rachel Reeves will outline the government’s tax and spending plans with increasing speculation she will have to raise taxes to meet her self-imposed fiscal rules.
Yael Selfin, chief economist at KPMG UK, said the “weak start to the third quarter [is] a sign of things to come”.
“Economic activity is expected to slow in the second half of the year as the temporary factors which pushed up growth in the first half of 2025 begin to fade,” she said.
“Additionally, the later date of the Autumn Budget could prolong some uncertainties for businesses, delaying investment decisions and acting as a drag on growth until more clarity emerges.”
Responding to the latest growth figures, a Treasury spokesperson said: “We know there’s more to do to boost growth because whilst our economy isn’t broken, it does feel stuck.
“That’s the result of years of underinvestment, which we’re determined to reverse through our plan for change.
Shadow chancellor Sir Mel Stride said: “Any economic growth is welcome – but this government is distracted from the problems the country is facing.
“While the government lurch from one scandal to another, borrowing costs recently hit a 27-year high – a damning vote of no confidence in Labour that makes painful tax rises all but certain.”
By BBC
