UK economy defies forecasts with unexpected growth of 0.4% in July, ONS figures show
It comes as economic growth is predicted to have ground to a halt as a result of Brits swapping shopping for social activities like outdoor events and drinking at pubs
The UK economy grew by 0.4% in July, according to the latest figures from the Office for National Statistics.
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It comes as forecasts showed UK economic growth was set to have ground to a halt in July, as consumers swapped spending in shops for drinking in pubs amid the heatwaves and Fifa World Cup.
Most economists were expecting gross domestic product (GDP) to have shown no growth in July, but the latest Office for National Statistics (ONS) defied expectation.
What was expected to mark a downbeat start to Andy Burnham's leadership, who was appointed Prime Minister during the month, but instead turned into something altogether more promising.
The figures were boosted by AI, according to the latest report, with the services sector leading the way when it came to the promising results.
It comes just days after Chancellor John Healey insisted that there was an “optimistic story” when it comes to the UK economy, with figures set to reveal it is “turning a corner”.
In June, the UK economy grew 0.3% as hospitality and leisure firms received a boost from football fever and the prolonged hot weather.
It meant GDP expanded by 0.4% during the second quarter of the year.
However, economists have predicted that activity was muted in July as other parts of the economy lagged, offsetting the continued World Cup and hot weather boost to hospitality.
Analysts for Investec said: “After a positive first half of the year, where the UK economy actually outperformed the rest of the G7, growing by 1%, we expect the third quarter will begin with a weaker performance.
“Some evidence of this has already been seen in soft retail sales for the month, whilst we expect the rise in household utility bills due to the 13% uplift to the energy price cap would have had a dampening effect.”
Economists for Deutsche Bank said they were expecting the economy to “slow from its current torrid pace of growth”.
“The real income shock from the Middle East has yet to fully filter through the data,” they said.
“One-offs that have buoyed the economy will also likely unwind. And some budget uncertainty could put households and businesses off from spending.”