- GDP contracted by 0.5% in July
- Overall, the economy did eke out growth in the three months to July
- Strike action and wet weather main contributors
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK GDP figures:
“July’s horrendously bad weather wreaked havoc with many of our summer plans. BBQs were cancelled, weddings were moved indoors, and shopping trips postponed.
“It’s hardly surprising that the economy shrank – unseasonable rainfall acted like a great big wet blanket.
“Who needed summer clothes when the only viable option was to turf out the wellies? And no construction worker wanted to be up on a roof during one of many torrential downpours.
“But it’s the extent of the contraction that is causing a stir and will undoubtedly be part of the conversation when the Bank of England’s MPC makes its decision on interest rates next week.
“Construction wasn’t just curtailed by the weather. A slowdown in the housing market as increased mortgage costs upended many buying plans also forced property developers to hit the brakes.
“Increased costs, whether it be mortgage payments, rents, energy bills or the weekly shop, all pushed NHS workers and teachers out onto picket lines.
“With both junior and senior doctors out on strike during the month, tens of thousands of appointments and procedures were cancelled.
“It will have been unbearably hard for many patients to deal with and will have kept many of those off on sick leave, but it also had a knock on to recruitment services.
“If there’s no operation there’s no need for agency staff who routinely plug NHS staffing gaps.
“And every time a school is closed parents have to resort to the childcare juggling routine that often results in them having to take a day’s leave to cover the gaps.
“It’s not all bad news, over the three months to July the economy did manage to keep on trucking and people did find ways to entertain themselves indoors.
“‘Barbenheimer’ dragged many people out to the big screen, often for a double bill, and a bit of mud isn’t going to put off most music lovers when there’s a festival to attend.
“It’s been a summer of sport and entertainment, which even cost-of-living pressures and the aforementioned rain couldn’t totally kibosh.”
