LONDON: Britain’s economy grew less than expected in July, with a fall in electricity generation possibly reflecting a sharp rise in energy rates and the construction sector also hit by a surge in inflation, official data showed on Monday.
GDP grew 0.2% since June. A Reuters poll of economists pointed to a month-on-month increase of 0.4% in July.
In three months from July, Gross Domestic Product was flat compared to the previous three-month period.
“Anecdotal evidence suggests that there may be changes in consumer behavior in response to increased prices and some signs of reduced demand,” national statistics office (ONS) said in relation to the decline in power generation.
Electricity prices rose 54% in the 12 months to July, following a hike in electricity costs last week as new Prime Minister Liz Truss announced a cap on domestic energy tariffs.
That announcement downplayed the risk of a severe hit to the economy, even though the cost of 100 billion pounds ($116.16 billion) or more is already to public finances.
last month, bank of england The UK is forecast to hit a recession at the end of 2022 and will not come out of it until early 2024, largely due to rising energy prices impacting living standards.
BOE It is expected to raise interest rates again on September 22 as it seeks to counter the inflation rate above 10%.
The ONS said a July heat wave could also be a factor behind the fall in electricity demand, although there were indications it increased visits to ice cream makers and amusement parks and golf clubs.
Services output grew 0.4% monthly in July, but industrial output declined 0.3% and construction declined 0.8%, reflecting a jump in prices for materials, part of broader inflation growth, along with The working hours have been lost due to the hot weather itself. ,
GDP declined 0.6% in June, including two days of public bank holidays to celebrate 70 years of the late Queen Elizabeth on the British throne.
But an ONS spokesperson said the impact of holidays in July was not a major factor.
Separate trade data also showed the impact of the price hike, with the value of fuel imports reaching an all-time high of £11 billion in July and representing a record 21% of all commodity imports.
GDP grew 0.2% since June. A Reuters poll of economists pointed to a month-on-month increase of 0.4% in July.
In three months from July, Gross Domestic Product was flat compared to the previous three-month period.
“Anecdotal evidence suggests that there may be changes in consumer behavior in response to increased prices and some signs of reduced demand,” national statistics office (ONS) said in relation to the decline in power generation.
Electricity prices rose 54% in the 12 months to July, following a hike in electricity costs last week as new Prime Minister Liz Truss announced a cap on domestic energy tariffs.
That announcement downplayed the risk of a severe hit to the economy, even though the cost of 100 billion pounds ($116.16 billion) or more is already to public finances.
last month, bank of england The UK is forecast to hit a recession at the end of 2022 and will not come out of it until early 2024, largely due to rising energy prices impacting living standards.
BOE It is expected to raise interest rates again on September 22 as it seeks to counter the inflation rate above 10%.
The ONS said a July heat wave could also be a factor behind the fall in electricity demand, although there were indications it increased visits to ice cream makers and amusement parks and golf clubs.
Services output grew 0.4% monthly in July, but industrial output declined 0.3% and construction declined 0.8%, reflecting a jump in prices for materials, part of broader inflation growth, along with The working hours have been lost due to the hot weather itself. ,
GDP declined 0.6% in June, including two days of public bank holidays to celebrate 70 years of the late Queen Elizabeth on the British throne.
But an ONS spokesperson said the impact of holidays in July was not a major factor.
Separate trade data also showed the impact of the price hike, with the value of fuel imports reaching an all-time high of £11 billion in July and representing a record 21% of all commodity imports.