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Economy flatlines in July: "Welcome to zero growth Britain"

ended 12. September 2025

THE UK economy flatlined in July 2025, following growth of 0.4% in June 2025 and a fall of 0.1% in May 2025, according to official data published this morning. One expert called for “a serious rethink at The Treasury” while another warned “there will be further pressure on the Chancellor to raise taxation in this Autumn’s Budget”.

Real gross domestic product (GDP) grew by 0.2% in the three months to July 2025 compared with the three months to April 2025, down from three-month-on-three-month growths of 0.3% in June 2025 and 0.6% in May 2025.

Services output grew by 0.4% in the three months to July 2025, compared with the three months to April 2025, and was the main contributor to GDP growth over this period, after growing 0.4% in the three months to June 2025.

Production output fell by 1.3% in the three months to July 2025, compared with the three months to April 2025, following a fall of 0.3% in the three months to June 2025.

Construction output increased by 0.6% in the three months to July 2025, compared with the three months to April 2025, following growth of 1.2% in the three months to June 2025.

Services and construction both grew in July 2025, growing by 0.1% and 0.2% respectively, while production fell by 0.9% in July 2025.

Riz Malik, Director at Southend-on-Sea-based R3 Wealth, was withering: “Welcome to zero growth Britain. The UK is headed by a no-idea Chancellor and a party that had 14 years in waiting to develop a robust economic plan. The UK proceeds into the abyss with only hope and prayers for guidance. The Budget is going to be grim.”

Steve Witt, Co-founder at Not Just Travel, said simply: “The economy has had a rocky road with Labour since it came to power.”

Meanwhile, Craig Fish, Director at London-based Lodestone Mortgages, pointed the finger firmly at Number 11: “If ever there was proof that Rachel Reeves has run out of ideas, it’s today’s GDP figures. The economy flatlined in July, hardly the summer bounce anyone was hoping for.

"With Christmas on the horizon, retailers will already be sweating, likely forced into early sales just to keep tills ringing.

"Construction and services are just about holding things together, but production is in freefall, and consumer confidence is shaky at best. Britain needs decisive leadership and a plan for growth and that starts with a serious rethink at the Treasury.”

Colin Low, Managing Director at Ipswich-based Kingsfleet, said more taxation in the Budget is now likely: "12 months on from the General Election where the focus was to be on growth, we can see the progress. The result is zero. This latest data shows that the economy failed to grow at all in July.

“It’s true that it hasn’t gone backwards but the anaemic figures that we are seeing month after month do not correlate with the manifesto focus on growing the economy.

"A growth focus was central to the delivery of increased public services and, without it, there will be further pressure on the Chancellor to raise taxation in this Autumn’s Budget.”

Eamonn Prendergast, Chartered Financial Adviser at Bromley-based Palantir Financial Planning Ltd, says the Chancellor needs to back business: "Flat GDP in July shows just how fragile the recovery is. Services are doing all the heavy lifting, but with production sliding 1.3% and construction cooling, the economy feels stuck in neutral.

“For small businesses especially, confidence to invest and expand is critical, yet too often they’re held back by tax cliff-edges, high costs and red tape. If the Chancellor really wants to kickstart growth, she must clear those barriers and back the entrepreneurs who can turn stagnation into momentum.”

Anita Wright, Chartered Financial Planner at Ribble Wealth Management, said the UK economy flatlining in July would be no surprise to those on the ground.

She added: “After a stronger June, this stall highlights the fragility of growth and the lack of momentum in the real economy. Confidence remains subdued, costs remain elevated, borrowing is expensive and people are reluctant to commit to longer-term financial decisions. Households are still adjusting to higher interest rates and squeezed disposable incomes.”

Scott Gallacher, Director at Leicester-based Rowley Turton, was also unsurprised: “Disappointing news for both the country and the Chancellor, but are any of us really surprised? The economy is treading water, and unless Rachel Reeves can get us swimming quickly, we risk drowning in a sea of government debt.”

7 responses from the Newspage community

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Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
Welcome to zero growth Britain. The UK is headed by a no-idea Chancellor and a party that had 14 years in waiting to develop an robust economic plan. The UK proceeds into the abyss with only hope and prayers for guidance. The Budget is going to be grim.
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Editor
Craig Fish
Director at Lodestone Mortgages
If ever there was proof that Rachel Reeves has run out of ideas, it’s today’s GDP figures. The economy flatlined in July, hardly the summer bounce anyone was hoping for. With Christmas on the horizon, retailers will already be sweating, likely forced into early sales just to keep tills ringing. Construction and services are just about holding things together, but production is in freefall, and consumer confidence is shaky at best. Britain needs decisive leadership and a plan for growth and that starts with a serious rethink at the Treasury.
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Editor
Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
The UK economy has been on life support for years, and the new government promised change that would lead to growth. That’s simple not happened. Starmer needs to grasp the nettle on this and shake up policy so that businesses can expand. The obvious answer here is national insurance rates in jobs. This has had a detrimental effect on companies wanting to expand and means that figures like today’s GDP are expected. Labour can’t tax their way out of this crisis, they need to grow their way out and only British business can do that.
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Scott Gallacher
Director at Rowley Turton
Disappointing news for both the country and the Chancellor, but are any of us really surprised? The economy is treading water, and unless Rachel Reeves can get us swimming quickly, we risk drowning in a sea of government debt.
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Editor
Eamonn Prendergast
Chartered Financial Adviser at Palantir Financial Planning Ltd
Flat GDP in July shows just how fragile the recovery is. Services are doing all the heavy lifting, but with production sliding 1.3% and construction cooling, the economy feels stuck in neutral. For small businesses especially, confidence to invest and expand is critical, yet too often they’re held back by tax cliff-edges, high costs and red tape. If the Chancellor really wants to kickstart growth, she must clear those barriers and back the entrepreneurs who can turn stagnation into momentum.
Copy

Editor
Anita Wright
Chartered Financial Planner at Ribble Wealth Management
The UK economy flatlining in July is no real surprise to those of us on the ground. After a stronger June, this stall highlights the fragility of growth and the lack of momentum in the real economy. Confidence remains subdued, costs remain elevated, borrowing is expensive and people are reluctant to commit to longer-term financial decisions. Households are still adjusting to higher interest rates and squeezed disposable incomes.
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Colin Low
Managing Director at Kingsfleet
12 months on from the General Election where the focus was to be on growth, we can see the progress. The result is zero. This latest data shows that the economy failed to grow at all in July. It’s true that it hasn’t gone backwards but the anaemic figures that we are seeing month after month do not correlate with the manifesto focus on growing the economy. A growth focus was central to the delivery of increased public services and, without it, there will be further pressure on the Chancellor to raise taxation in this Autumn’s Budget.