By Aysu Bicer
LONDON (AA) – The much-anticipated bounce back in the UK economy following the general election has failed to materialize, with official data showing no growth for the second consecutive month in July.
According to the Office for National Statistics (ONS) data released on Wednesday, gross domestic product (GDP) remained unchanged in both June and July, dashing hopes for a post-election surge in economic activity.
This economic stagnation came as a surprise to financial markets, which had forecast a modest 0.2% rise in July.
Despite this flat performance, the economy grew by 0.5% in the three months to July, buoyed by stronger growth earlier in the year.
The first quarter of 2024 saw a 0.7% expansion, followed by a 0.6% increase in the second quarter, suggesting a steady recovery from the mild recession that hit in late 2023.
However, the latest ONS data indicates that the momentum has slowed significantly since Labour took office in June, with the City taken aback by the economy's weak performance during the government's first weeks in power.
Chancellor Rachel Reeves acknowledged the challenging outlook, stating: "I am under no illusion about the scale of the challenge we face, and I will be honest with the British people that change will not happen overnight. Two quarters of positive economic growth do not make up for 14 years of stagnation."