The UK economy flatlined in July for the second month in a row, according to the latest official figures, as the Chancellor said she was “under no illusion about the scale of the challenge” the country faces.
The Office for National Statistics (ONS) said gross domestic product (GDP) recorded no growth in July.
Economists had been expecting GDP to edge up by 0.1% in the month, according to a consensus provided by Pantheon Macroeconomics.
The UK held a general election at the beginning of the month, with some recent surveys suggesting a post-election increase in activity as businesses held out for political stability.
The latest data comes after the economy continued its recovery from recession at the end of last year, with growth of 0.6% between April and June.
It showed the country was turning a corner after dipping into a technical recession, which is defined as two consecutive quarters of negative growth.
But hopes of a stronger recovery could falter after two months of stagnating growth.
Chancellor Rachel Reeves said: “I am under no illusion about the scale of the challenge we face and I will be honest with the British people that change will not happen overnight.
“Two quarters of positive economic growth does not make up for fourteen years of stagnation.
“That is why we are taking the long-term decisions now to fix the foundations of our economy.”
The ONS’s data showed that the services sector increased by 0.1% in July, but by 0.6% across the three months to July.
The accommodation and food and beverages category ticked up by 0.9%, with accommodation, including hotels, the biggest contributor with 2.2% growth recorded during the month.
ONS director of economic statistics Liz McKeown said: “The economy recorded no growth for the second month running, though longer term strength in the services sector meant there was growth over the last three months as a whole.
“July’s monthly services growth was led by computer programmers and health, which recovered from strike action in June. These gains were partially offset by falls for advertising companies, architects and engineers.
“Manufacturing fell, overall, with a particularly poor month for car and machinery firms, while construction also declined.”
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