The U.K. economy flatlined in July, a substantial slowdown from the growth seen the prior month, increasing the pressure on the Bank of Egl;and to continue easing monetary policy.
Data released earlier Friday by the Office for National Statistics showed that U.K. gross domestic product was unchanged in July on a monthly basis, following the expansion of 0.4% in June.
Services and construction both grew in July 2025, growing by 0.1% and 0.2% respectively, while production fell by 0.9% in July 2025, according to the ONS.
On an annual basis, the U.K. economy expanded by 1.4% in July, unchanged from the prior month and largely as expected.
“After a surprisingly stronger Q2-25, where the U.K. claimed the fastest growth rate among G7 economies, all signs point to a slowdown in economic activity in the second half of the year,” said Deutsche Bank’s chief economist Sanjay Raja. “A course correction in trade-fronting, stockpiling, net acquisitions of precious metals, and public sector spending, we think, will see U.K. GDP growth slow into H2-25.”
The Bank of England holds its next policy-setting meeting next week, having cut its key interest rates to 4% last month, taking the cost of borrowing to the lowest level for more than two years.
The cut, from the previous rate of 4.25%, was the fifth since August last year, but was only narrowly backed by policymakers with inflation now expected to peak at 4% in September, twice the Bank’s target rate and above the 3.8% rate it predicted in its May report.
U.K. Chancellor Rachel Reeves is set to announce the next raft of economic policy announcements later this year, and could well have to raise tens of billions of pounds in taxes after a rebellion in the ruling Labour Party against welfare reforms fed doubts about the government’s ability to cut spending sufficiently.
Source :
https://www.investing.com/news/economic-indicators/uk-economic-growth-flatlined-in-july-4236390
