UK Economy Stalls Again in July as Recovery Momentum Fades

The UK economy stagnated for the second consecutive month in July, indicating that the momentum for a rapid recovery from the recession is waning. According to the Office for National Statistics (ONS) on Wednesday, the Gross Domestic Product (GDP) remained flat after showing no growth in June. Economists had previously predicted a 0.2% growth for July.

The declines in production and construction were offset by rebounds in the services and retail sectors. In the first half of the year, the UK economy grew at a rate of 1.3%, outpacing all other G-7 members. However, the performance is expected to weaken significantly in the second half. Both the Bank of England and private sector economists forecast an average economic growth of 0.3% for the third and fourth quarters.

Labour, which won a landslide victory in the July elections, is relying on economic growth to mend public finances and deliver on promises made to voters to improve living standards. Prime Minister Keir Starmer has committed to achieving the fastest sustained growth among the G-7 through a reform plan and increased investment. This goal remains ambitious following more than a decade of stagnant productivity growth.