Official data reveals that the UK economy experienced a contraction of 0.5% in July, a development attributed to industrial disputes and exceptionally inclement weather conditions. These figures have ignited apprehensions of an impending recession in the latter half of this year.
The Office for National Statistics (ONS) reported that all three pivotal sectors of the economy—manufacturing, services, and construction—simultaneously contracted for the first time since the summer of the preceding year.
Economists had initially projected a 0.2% decline in gross domestic product (GDP), but the ONS attributed the downturn to strikes undertaken by junior doctors, which curtailed healthcare activity. Additionally, retailers, having thrived during a warm June, faced setbacks in July, which ranked as the sixth wettest on record.
GDP had previously shown resilience, expanding by 0.5% in June following a slight dip of 0.1% in May 2023 and a 0.2% increase in April 2023.
Earlier this month, revisions in GDP growth for 2020 and 2021 upwardly adjusted the figures. Consequently, GDP in the last quarter of 2021 was estimated to surpass pre-coronavirus pandemic levels by 0.6%, compared to the prior estimate of being 1.2% below.
