Belfast Telegraph

Recession fears ease following surprise 0.3% jump in GDP

The Office for National Statistics revealed that GDP for the three months to July was 0% with construction, manufacturing and services all growing.

Fears of a recession have receded after the latest GDP figures showed a surprise rise (Dominic Lipinski/PA)
Fears of a recession have receded after the latest GDP figures showed a surprise rise (Dominic Lipinski/PA)

By Simon Neville, PA City Editor

The economy grew by 0.3% in July, reducing the risk that the UK is heading for a recession, according to the Office for National Statistics.

Officials said construction, manufacturing and the all-important services sectors all grew in July, although agriculture fell.

However, averaging out over the three months, only services grew which meant that, overall, the UK economy flatlined in the three months to July, sitting firmly at 0%.

While the largest part of the economy, services sector, returned to growth in the month of July, the underlying picture shows services growth weakening through 2019. Rob Kent-Smith, ONS

ONS head of GDP Rob Kent-Smith said: “GDP growth was flat in the latest three months, with falls in construction and manufacturing.

“While the largest part of the economy, services sector, returned to growth in the month of July, the underlying picture shows services growth weakening through 2019.

“The trade deficit narrowed due to falling imports, particularly unspecified goods (including non-monetary gold), chemicals and road vehicles in the three months to July.”

There had previously been a 0.2% fall in GDP in the second quarter of the year, and if there are two consecutive falling quarters the country is officially in a recession.

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Production fell over the three months to July, following a large fall in April after the Brexit date was extended (ONS/PA)

However, Monday’s latest statistics from the ONS only go up until July – before the latest political uncertainty and a series of closely-watched data from around the world that shows economies slowing.

Howard Archer, chief economic adviser at the EY Item Club, said: “While GDP growth of 0.3% month on month in July looks to go a long way towards guaranteeing that the economy will return to growth in the third quarter, disappointing survey evidence for August relating to manufacturing, construction and services activity as well as retail sales suggests that the economy is currently finding life challenging as it is hampered by serious uncertainties relating to Brexit, the domestic political situation and the global economy.”

PA

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