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Raymond Doherty 9 Sep 2019 02:12pm

Minor July GDP growth eases recession fears

There was a rise of 0.3% in UK GDP in July but growth remains flat in the longer term

Following a contraction of 0.2% in Q2 there were fears that the UK was headed for recession as Brexit uncertainty and political instability took their toll but, according to the Office for National Statistics (ONS), the services sector drove a minor increase in July.

In the three months to July, however, growth remained flat with falls in construction and manufacturing.Head of GDP at the ONS Rob Kent-Smith said, ”While the largest part of the economy, the services sector, returned to growth in the month of July, the underlying picture shows services growth weakening through 2019.

“The trade deficit narrowed due to falling imports, particularly unspecified goods (including non-monetary gold), chemicals and road vehicles in the three months to July."

Suren Thiru, head of economics at the British Chambers of Commerce, said, “While the near-term outlook remains challenging, the UK economy should avoid entering a recession this quarter. Stockpiling is likely to make a marked contribution to growth in the third quarter, supported in part by some firms restocking ahead of October 31st.

“Avoiding a messy and disorderly exit from the EU is critical as such an outcome would likely deliver a major negative shock to the economy. At the same time, government must take swift and tangible action to inject momentum and confidence into the UK economy, including the delivery of transformative infrastructure projects across the country.”

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