Sharp decline in UK economy in July revives risk of recession

While most economists had expected the UK to eke out modest growth in the third quarter, the scale of July’s decline makes a contraction more likely.

BOE governor Andrew Bailey has signalled the most aggressive hiking cycle since the 1980s is almost complete.

The UK economy shrank at the fastest pace in seven months in July as strikes and wet weather hit activity harder than expected, reviving fears that a recession may be under way.

Gross domestic product slipped by 0.5% following a 0.5% gain in June, the Office for National Statistics said. Economists had expected a contraction of 0.2%. Services, construction and manufacturing all shrank.