UK GDP Unexpectedly Stagnates In July
2024-09-01
3037
(fxcue news) - The UK economy unexpectedly stagnated in July as falls in production and construction was offset by an increase in services output, official data revealed Wednesday.
Real gross domestic product showed nil growth for the second straight month, the Office for National Statistics reported. GDP was forecast to grow 0.2 percent.
The 0.1 percent rise in services output was offset by decreases of 0.8 percent in production output and 0.4 percent in construction output.
In the three months to July, GDP advanced 0.5 percent with strong contribution from services output. Services output gained 0.6 percent and construction climbed 1.2 percent, while production output was down 0.1 percent.
In a separate report, the ONS said the monthly fall in industrial output resulted primarily from a decrease of 1.0 percent in manufacturing, supported by smaller contributing decreases in electricity and gas, and water supply and sewerage. These rises were partially offset by a 3.9 percent rise in mining and quarrying, the ONS said.
Although the economy stagnated in July, it does not mean the UK is on the cusp of another recession, Capital Economics' economist Ruth Gregory said.
The economist said the stickiness of inflation will keep the central bank on hold in September. But today's data has made an interest rate cut next Thursday a bit more likely.
In July, the visible trade deficit widened to GBP 20.0 billion from GBP 18.9 billion in June, the statistical office said in a separate report.
The surplus on services narrowed to GBP 12.5 billion from GBP 13.6 billion a month ago. As a result, the total trade gap widened to GBP 7.5 billion from GBP 5.3 billion in June.
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