UK's economic growth halted in July
The economy of Britain experienced no progress for the second month in a row in July. As reported by the Office for National Statistics (ONS), the Gross Domestic Product (GDP) remained stable, similar to the state in June. Despite the expansion in the service sector, the industry and construction sectors registered a decline. Economists, as per Reuters poll, had predicted a 0.2% growth compared to the preceding month.
Economist Hayley Low from the National Institute of Economic and Social Research anticipates growth during the latter half of the year. However, this progress might not be as substantial as the commencement of the year when the economy recuperated from a mild recession. In the first quarter, GDP surged by 0.7%.
Prime Minister Keir Starmer had promised an annual growth rate of 2.5% in his campaign. The Bank of England (BoE), slated to review the interest rate on September 19, has projected a GDP increase of approximately 1.25% this year. In early August, BoE initiated a reversal of its monetary policy, reducing the key rate to 5.00%. Market participants speculate that the central bank will maintain its current stance next week and only consider a second rate cut following the reception of additional data in November.
The British economy, despite showing expansion in the service sector, has faced declines in both the industry and construction sectors, as mentioned in July. Economist Hayley Low, who is British herself, believes that the economy might see growth towards the end of the year, although not as substantial as the start.
