Britain’s economy stagnated for the second month in a row, according to official data, marking the first such occurrence under the new Labour government.
The Office for National Statistics (ONS) reported that the UK’s GDP showed 0% growth in July. This comes after expectations of a 0.2% rise in economic activity during Sir Keir Starmer’s first month as Prime Minister, following the general election victory on July 4. GDP growth had already dropped to 0% in June, down from 0.4% in May.
Economists had previously described the economy as “going gangbusters” during the final months of Conservative leadership, with GDP expanding by 0.7% in the first quarter and 0.6% in the second quarter of the year.
Liz McKeown, ONS Director of Economic Statistics, noted, “July’s monthly services growth was driven by computer programmers and health services, which recovered from June’s strike action. However, these gains were partly offset by declines in advertising, architecture, and engineering sectors. Manufacturing experienced an overall decline, particularly in car and machinery firms, while construction also saw a decrease.”
Chancellor Rachel Reeves commented, “I am fully aware of the challenges we face and will be upfront with the British people that change won’t happen overnight. Two quarters of positive economic growth do not compensate for fourteen years of stagnation.”
Suren Thiru, Economics Director for the ICAEW, added, “These figures confirm that the UK economy lost momentum following the general election, as declining manufacturing and construction output caused overall activity to stagnate in July.”
