The UK economy showed no growth in July, according to official data released on Friday, matching economists’ expectations after a strong 0.4% rebound in June.
Gross domestic product (GDP) in July was 1.4% higher than the same month a year earlier, unchanged from June’s annual pace but slightly below the 1.5% forecast in a Reuters poll.
During the first half of 2025, Britain’s economy expanded more strongly than in recent years, with 0.7% growth in the first quarter and 0.3% in the second. This momentum was partly fueled by increased government spending and exporters rushing to deliver goods before new U.S. tariffs took effect.
However, analysts warn that growth is likely to slow in the second half of the year. Global demand is expected to weaken under the weight of tariffs, while the domestic labour market shows signs of cooling. The Bank of England recently projected annual GDP growth of 1.25% for 2025—well below the 2% average seen between 2010 and 2019.
Finance Minister Rachel Reeves acknowledged on Thursday that the economy “isn’t broken, but it does feel stuck.” She expressed hope that upcoming pro-growth initiatives in her November 26 budget would boost confidence and lead the Office for Budget Responsibility to give a more optimistic outlook.
Meanwhile, many businesses remain cautious, holding back on hiring and investment. Uncertainty over tougher employment rules and the possibility of new tax increases has led firms to adopt a wait-and-see approach.
