UK economy stagnated in July

[LONDON] Britain’s economy stagnated in July after a strong 0.4 per cent bounce in June, official figures showed on Friday (Sep 12).

Economists polled by Reuters had forecast zero growth for the month.

Britain’s economy grew robustly by its recent standards in the first half of 2025, expanding by 0.7 per cent in the first quarter of the year and 0.3 per cent in the second – partly due to higher government spending and exporters trying to ship goods before the imposition of US tariffs.

But economists expect slower growth in the second half as tariffs weigh on global demand and Britain’s labour market weakens. Last month, before the release of second-quarter data, the Bank of England forecast annual growth of 1.25 per cent for this year well below the average of 2 per cent between 2010 and 2019.

Finance minister Rachel Reeves said on Thursday that Britain’s economy “isn’t broken, but it does feel stuck”.

She hopes that pro-growth measures in the run-up to her annual budget on Nov 26 will lead to a more favourable assessment of Britain’s prospects from the Office for Budget Responsibility.

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But some businesses say they are keeping hiring and investment plans on hold, as they await details of tougher employment legislation and whether they will be the main target again for tax rises. REUTERS