12 September 2025 , 09:40
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The UK economy stagnated in July as the largest decline in the manufacturing sector in a year countered a strong month in retail.
The Office for National Statistics (ONS) reported zero growth in gross domestic product (GDP) month on month in July, compared to 0.4% growth in June.
This occurred after the manufacturing sector experienced a 1.3% decline in activity - the largest contraction since July 2024.
This limited growth in the broader economy, with the services sector increasing by 0.1% due to a 0.6% expansion in retail and a 0.2% growth in construction.
Liz McKeown, ONS director of economic statistics, stated: "Declines in production were caused by widespread weaknesses across manufacturing industries."
In response to the latest GDP data, a Treasury spokesperson said: “We know there’s more to do to boost growth because while our economy isn’t broken, it does feel stuck.
“That’s the result of years of underinvestment, which we’re determined to reverse through our plan for change.
“We’re making progress: growth this year was the fastest in the G7; since the election, interest rates have been cut five times and real wages have risen faster than they did under the last government.
“There’s more to do to build an economy that works for, and rewards, working people.”
Tory shadow chancellor Sir Mel Stride said: “Any economic growth is welcome - but this Government is distracted from the problems the country is facing.
“While the Government lurches from one scandal to another, borrowing costs recently hit a 27-year high - a damning vote of no confidence in Labour that makes painful tax rises all but certain.
“It is little wonder that Starmer has stripped Reeves of control over the budget. But sidelining her is not enough - he must also reject her failed economic approach that has left Britain poorer.”
Politics Editor