UK economy holds steady in July with 0.4% growth
The UK economy expanded by 0.4% in July, according to the latest figures from the Office for National Statistics (ONS).
The monthly gross domestic product (GDP) figures come off the back of an encouraging June reading of 0.3% growth, following flat growth in May – which was revised down from 0.1%.
The ONS said July’s growth was due to monthly rises of 0.4% in services, 0.2% in production and 0.1% in construction.
However, on a quarterly basis, production output and construction output both fell by 0.5%, while services output expanded by 0.6%.
In the three months to July, real GDP also underwent a 0.4% growth, unchanged from the three months to June.
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Growth sustainability yet to be determined
With inflation having risen to 2.9% in July and the Bank of England’s Monetary Policy Committee (MPC) due to make the next base rate decision next week, today’s GDP figures offer some positivity – despite the broader uncertainty around whether they indicate a period of sustained growth.
Richard Pike, sales and marketing director at Phoebus, commented: “Today’s GDP figures show the economy has grown for a second consecutive month, with output increasing by 0.4%. While two months of growth is a positive sign, the wider picture remains one of continued uncertainty.
“The mortgage market is still operating against a backdrop of affordability pressures, so a return to growth should not be mistaken for a return to normality. Lenders will need to remain responsive as different groups of borrowers experience very different financial situations and circumstances.
“The real test now is whether this growth can be sustained. A stronger and more stable economy would give borrowers, lenders and the wider property market greater certainty, but the focus will remain on whether today’s figures mark the beginning of a more consistent recovery rather than another short-lived improvement.”
