The UK economy underperformed expectations, as GDP shrunk by 0.5% in July. The latest figures, released today by the ONS, marks the largest contraction in seven months. Economists had expected the figure to come in around -0.2%. July saw output fall in all three main sectors: services were down 0.5%, production was down 0.7% and construction fell by 0.5%. Rising interest rates, poor weather and strikes all played a role in the figures. It should give the Bank of England pause for thought ahead of their next interest rates decision…
In the longer-term, the picture isn’t so bleak. In the three months to July, growth increased by 0.2%. However, the latest numbers don’t look good for Rishi Sunak and his pledge to grow the economy, especially if more interest rate rises are on the cards with an election looming. He can’t rely on another upward revision to save him now.