UK economy stalls in July, as slowdown sets in

U.K. economic growth flatlined in July, according to data published Friday, adding to Chancellor Rachel Reeves' headache ahead of the Autumn Budget.

The figure was in line with expectations of economists polled by Reuters, and follows a 0.4% expansion in June.

In July, weakness was concentrated in production output, which contracted by 0.9%, while services and construction output both inched higher, the U.K.'s Office for National Statistics noted.

It comes after the economy grew by a better-than-expected 0.3% in the second quarter, although this was down from bumper growth of 0.7% seen in the first quarter.

Economists now expect a slowdown to take hold of the U.K. in the latter half of 2025.

“After a surprisingly stronger second quarter, 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,” Sanjay Raja, Deutsche Bank's chief U.K. economist, noted this week.

“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 the second half of 2025,” he added in emailed comments.