Games add to GDP boost - Chamber
The UK economy grew by 0.2 per cent in July - boosted by the Commonwealth Games and the UK hosting the Women 's Euro Championship.
But fears are growing that next Monday 's bank holiday for the Queen 's state funeral and the 10 days of national mourning could push the UK into recession sooner than anticipated.
The Office for National Statistics said the services sector was the biggest contributor to July 's growth, helped by the Women's Euro Championship.
However, while the economy expanded in July, the growth was slower than analysts had expected.
Raj Kandola, head of policy at the Greater Birmingham Chambers of Commerce, said: “It was pleasing to see the UK economy return to growth in July, albeit at a lower level than expected by many city analysts.
“Growth was predicated on a welcome boost to the services industry with once in lifetime events such as the Commonwealth Games in Birmingham playing an important role in driving activity.
“However, it was no surprise to see activity in the production sector fall given the drop in the supply of gas and electricity as geopolitical events continue to impact the domestic landscape.
“The ONS also referenced the impact that labour market shortages were having on output, a trend we 've seen locally as a record number of businesses reported difficulty in finding staff in our latest Quarterly Business Report.
“Whilst the introduction of an energy price cap will help to offset a broader recession, many businesses are still being hammered by huge cost pressures as supply chain disruption, rampant inflation and unprecedented recruitment challenges continue to bite.
“As we 've set out in our latest Policy Manifesto we need the new Government to broaden the Shortage Occupation List, reverse the recent increases to National Insurance and introduce VAT relief for hospitality and non-essential retailers to give firms the breathing space they need to get through the next few months. ”
Gross domestic product (GDP) fell in June due to the extra bank holiday for the Queen's Jubilee.
GDP - which measures all the goods and services produced by the UK - fell by 0.6% in June because of two fewer working days.
Last month, the Bank of England said it expected the UK to fall into recession at the end of this year.
A recession is defined as two consecutive quarters, or three-month periods, of shrinking output. Between April and June, the economy contracted by 0.1 per cent compared with the previous quarter.
A bank holiday impacts growth because there are fewer people at work. Philip Shaw, chief economist at Investec, said: "It is quite possible that you get a contraction over the month as a whole, which results in the economy getting smaller over the quarter."
Read the GBCC Policy Manifesto.