Commenting on the latest ONS GDP data, Barret Kupelian, Chief Economist at PwC, says:
“At face value, one month of GDP rarely tells the whole story. July’s data, however, confirms our suspicions that the post-Liberation Day growth spurt across ex-US advanced economies is losing steam.
“The slowdown is most evident in the production sector of the economy, which is directly affected by tariffs, where output grew between February and May and contracted in June and July. By contrast, services remain the UK’s bulwark: public services (notably healthcare), professional services and the IT sector continue to expand, no doubt aided by the AI revolution.
“Looking ahead, we may see a replay of last autumn’s script: private-sector firms paring back spending in the run-up to the Autumn Budget, creating a headwind for headline growth into year-end. This isn’t a cliff edge, but it is a gear change, at least for now.”
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