UK GDP growth in July is expected to have flatlined, according to most economists, as consumer spending shifted from shops to pubs during the summer heatwaves and the Fifa World Cup. The Office for National Statistics (ONS) is due to release the July figures on Friday, and the consensus among analysts points to zero growth for the month.
GDP, or gross domestic product, is the standard measure of everything an economy produces in goods and services over a given period. A flat reading means the economy neither grew nor shrank.
What held UK GDP growth in July back
The picture is not straightforward. Hospitality continued to benefit from the World Cup and warm weather, just as it did in June, when the economy grew 0.3%. But other sectors did not keep pace. Retail and wholesale activity is predicted to have dipped by 0.3% for the month, dragging the overall number down.
Elliott Jordan-Doak, an analyst for Pantheon Macroeconomics, said any decline was ‘more likely the result of consumers shifting spending to drinking in the pub than a sign of weakening in consumer spending growth’. In other words, households may have reprioritised rather than cut back, moving money from the high street to the bar rather than keeping it in their pockets.
There was also a harder drag on the economy from manufacturing. According to the BBC, manufacturing contracted by 1.3% in July, making it the sharpest monthly decline in that sector since July the previous year. That kind of fall in production is not easily offset by a busy pub trade.
Analysts warn of tougher months ahead
The UK economy had performed well in the first half of the year. Analysts for Investec noted that the UK ‘actually outperformed the rest of the G7, growing by 1%‘ over that period. But they expected the third quarter to begin on a weaker footing, pointing to soft retail sales and the impact of a 13% increase to the energy price cap on household utility bills.
Economists for Deutsche Bank struck a similar tone, saying they expected the economy to ‘slow from its current torrid pace of growth’. They pointed to the real income shock from the Middle East as something that had ‘yet to fully filter through the data’, alongside the likely unwinding of one-off factors that had supported growth, and the possibility that budget uncertainty could put both households and businesses off spending.
The June reading had itself been buoyed by football fever and hot weather, contributing to GDP expanding by 0.4% across the second quarter as a whole. A flat July would represent a step back from that momentum.
The timing adds a political dimension. A flat GDP reading would mark a subdued start to the premiership of Andy Burnham, who was appointed Prime Minister during July. Chancellor John Healey had insisted there was an ‘optimistic story’ about the UK economy that was ‘turning a corner’, making the ONS release on Friday a closely watched one for the government.
The longer trajectory, as reported by the BBC, suggests the July stall was the beginning of a difficult stretch: the economy showed no growth across the next four rolling three-month periods, before recovering to 0.8% in April 2025, 0.6% in May, 0.3% in June, and 0.2% in July. That pattern points to a prolonged soft patch rather than a brief blip, with recovery arriving gradually rather than sharply.
