UK economy sees zero growth in July
Real GDP grew by 0.2% in the three months to July 2025, down from growth of 0.3% in the three months to June 2025, new data published by the Office for National Statistics shows.
Notably, the data shows that the UK economy experienced zero growth in July, following a 0.4% expansion in June and a 0.1% decline in May 2025.
Services output grew by 0.4% in the three months to July 2025, compared with the three months to April 2025, and was the main contributor to GDP growth over this period, after growing 0.4% in the three months to June 2025.
Production output fell by 1.3% in the three months to July 2025, compared with the three months to April 2025, following a fall of 0.3% in the three months to June 2025.
Construction output increased by 0.6% in the three months to July 2025, compared with the three months to April 2025, following growth of 1.2% in the three months to June 2025.
Commenting on the data, ONS Director of Economic Statistics Liz McKeown said that the agency was changing its presentation of GDP to lead with changes across three-month periods.
“Growth in the economy as a whole continued to slow over the last three months. While services growth held up, production fell back further.
“Within services, health, computer programming, and office support services all performed well, while the falls in production were driven by broad-based weakness across manufacturing industries.
“In the latest month GDP showed no growth, with increases in services and construction offset by falls in production.”
The data will heap added pressure onto Prime Minister Keir Starmer and Chancellor Rachel Reeves, who are facing increased pressure due to the country’s recent poor economic data.
The broader picture is one of tight fiscal constraints, rising borrowing costs, and the risk that, without stronger growth, the government ends up trapped in a cycle that is hard to escape, says Richard Carter (Head of Fixed Interest Research at Quilter Cheviot).
“For the public, that translates into tougher fiscal choices for the government, with less room to ease the tax burden or boost investment. This only adds to the headache facing Rachel Reeves as she prepares her second budget, with markets making clear that borrowing to fill the black hole in the public finances will be difficult and may ultimately point to further tax rises,” he said.
“There are some silver linings: savers may benefit from better yields on fixed income investments, while retirees shopping for an annuity will find the income they can secure today is far higher than just a few years ago.”
