Britain’s gross domestic product (GDP) contracted 0.5% in July, hit by strikes in health and education and wet weather that hurt retail trade, the ONS said on Wednesday. In June, activity increased by 0.5% in the United Kingdom, recalls the Office for National Statistics (ONS). The director of economic statistics at the ONS, Darren Morgan, points out that despite the fall in GDP seen in July, “The general context seems more positive, with an increase in activity in services, production and construction in the last three months.“The Finance Minister, Jeremy Hunt, for his part, reiterated the Government’s objective of halving inflation this year, the only way, according to him, to “generate sustainable growth and the salary increases that the country needs“.
“The loss of economic dynamics”
The business organization CBI points out that “wage increases and falling energy prices» compared to the heights reached after the Russian invasion of Ukraine «should help households and avoid a recession“However, she maintains that “The loss of economic momentum in the third quarter that companies now describe could keep the economy sluggish“. In addition to the slowdown in activity, the unemployment rate is rising in the UK: it rose to 4.3% in the three months to the end of July, after having risen significantly a month earlier to 4.2% .
And although inflation slowed noticeably in July in the UK, to 6.8% annually from 7.9% in June, it remains the highest among G7 countries, fueling expectations that the Bank of England will continue with its monetary adjustment. Especially since average salaries, excluding bonuses, continued to rise, registering a 7.8% increase in one year during the period from May to July.
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