UK Economy Stalls in July with Zero Growth Amid Manufacturing Decline

Britain's economy showed no growth in July 2025, marking a weak start to the second half of the year, with manufacturing output dropping sharply by 1.3%, particularly in computers, electronics, and pharmaceuticals, while the larger services sector grew modestly. Over the three months to July, GDP growth slowed to 0.2%, down from 0.3% in the previous quarter, reflecting a broader economic slowdown despite some growth in construction and services. Inflation remains a significant concern, reaching around 3.8% in July and 3.0% in August, which, along with rising job losses, is expected to dampen economic activity and limit the Bank of England's scope to cut interest rates further. The Labour government, led by Finance Minister Rachel Reeves, acknowledges the economy feels "stuck" and plans to address tax system reforms and business rates ahead of the November budget to stimulate investment and growth. Despite efforts including new economic advisers and a business-friendly board, the ONS data suggests subdued expansion, with ongoing challenges from US tariffs, inflation pressures, and uncertain fiscal forecasts. Sterling experienced slight volatility following the data release, and market expectations for additional monetary easing have decreased amid concerns over inflation and economic momentum.