Government must ‘tread fine line’ as economy fails to grow during July - Chamber

The UK economy flatlined for a second month in a row, despite analysts predicting 0.2 per cent growth, new figures revealed today.

And Greater Birmingham business leaders say the Government must now “tread a fine line” in next month’s Autumn Budget to help create a blueprint for growth.

The Office for National Statistics said Gross Domestic Product (GDP) remained unchanged during July, following a pre-election stalling of activity in June.

A summer of sport, including Euro 2024 and the Olympics, helped boost the services sector, but production and construction output both fell.

Raj Kandola (pictured), director of external affairs at Greater Birmingham Chambers of Commerce, said: “City analysts would have been surprised to see economic growth stagnate in July as output fell across manufacturing and construction sectors.

“Today's data will also make for interesting reading at the Bank of England and the highly anticipated interest rate cut is perhaps less certain in light of this morning's figures.

“Locally, early analysis from our latest Quarterly Business Report suggests service sector activity held up throughout the summer - mirroring national trends.

“Nevertheless, with potential tax rises on the horizon and energy prices set to increase in the coming months, the Government will need to tread a fine line at the upcoming Autumn Budget between maintaining fiscal responsibility and creating a blueprint that will drive investor confidence and unlock growth.”