- UK GDP showed no growth in July, flatlining for a second month
- Olympics and Euros provided limited boost to service sector
- UK economy still in positive territory, up 0.5% in the 3 months to July
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK GDP figures:
“Keeping the UK economy motoring was never going to be straightforward. But a small amount of growth had been expected in July, a month which gave a sport fuelled boost to the service sector but failed to deliver in both construction and production.
“Some of the problems have been well trailed. The transition to electric vehicles is having a global impact on the motor manufacturing sector and housebuilding had to wait until August for the Bank of England’s rate cut, which has already helped shore up confidence.
“Resolving industrial disputes will help boost growth in sectors like health, which did show positive momentum in a month that only saw one day of strike action from junior doctors.
“Persuading players like Amazon to continue to invest in tech services is a sound strategy but with so many rumours swirling about next month’s budget, getting more businesses to inject cash into the UK will require a deft hand.
“Transparency is vital, as is positivity, with the post-election honeymoon cut short by a government keen to keep expectations low.
“It’s a difficult dance and finding the correct tempo will take time. But with inflation lower and interest rates set to fall further the UK economy does have a pulse, it just needs the right stimulus.”
