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2025-09-12 17:15:15
[UK Economy Stuck: Data Reveals Weak Growth, Pressures Market Sentiment] ⑴ The UK economy stagnated in July, with monthly GDP data showing zero growth. This was primarily due to a sharp 1.3% drop in factory output, the largest decline in nearly a year, particularly in sectors like computers, electronics, and pharmaceuticals. Despite a slight 0.1% increase in the services sector, overall economic growth momentum slowed significantly, contrasting with the strong performance at the beginning of the year and signaling a more conservative second half of the year. ⑵ Data showed that the UK's goods trade deficit widened to £22.244 billion, the highest level since January 2022. This reflects the challenges facing foreign trade amid global economic uncertainty and market concerns raised by Trump's tariff rhetoric. Analysts point out that weak consumer spending and potential tax increases could further dampen economic activity. ⑶ Although the Bank of England forecasts full-year growth of 1.25%, well below the historical average, inflation expectations remain stubbornly high, projected to be double the central bank's target. Against this backdrop, financial market expectations for further Bank of England interest rate cuts this year remain at around 40%. These economic data and market reactions undoubtedly increased pressure on the government ahead of the upcoming budget. The UK Chancellor of the Exchequer stated that the economy "is not collapsed, but it feels a bit stagnant," and plans to boost growth by streamlining the tax system and reducing regulation. However, some businesses are temporarily putting hiring and investment plans on hold as they await clearer policy guidance, particularly regarding employment regulations and taxation plans, indicating continued market caution regarding the future economic outlook.
