The UK economy recorded no growth in July, according to recent data from the Office for National Statistics (ONS). This follows a growth rate of 0.4% in June. Monthly economic figures can be volatile. However, over the three-month period leading to the end of July, the economy did show a growth of 0.2% compared to the preceding three months.
The ONS indicated that the service sector performed positively, bolstered by contributions from the health sector, computer programming, and office support services. In contrast, the manufacturing sector exhibited weaker performance during the same period. As the government prepares for its Budget announcement on 26 November, there is increasing pressure to enhance economic growth.
Chancellor Rachel Reeves is expected to outline tax and spending measures in the upcoming Budget, with speculation that tax increases may be necessary to adhere to her fiscal guidelines. Some economists, like KPMG UK’s chief economist Yael Selfin, described the minimal growth at the start of the third quarter as potentially indicative of future trends. She noted that economic activity might decelerate in the second half of the year as factors that boosted growth earlier diminish. Furthermore, the later schedule for the Autumn Budget could lead to uncertainties for businesses, delaying investment decisions.
In reaction to the growth figures, a Treasury spokesperson acknowledged the need for greater efforts to stimulate growth, suggesting that while the economy is not broken, it feels stagnant due to years of underinvestment. Meanwhile, Shadow Chancellor Sir Mel Stride highlighted concerns about the government’s current focus on issues unrelated to economic challenges, asserting that rising borrowing costs and the political climate may pressure the government to implement painful tax increases.
Source: https://www.bbc.com/news/articles/c203edl1zq3o?at_medium=RSS&at_campaign=rss