Stuck in Neutral: Britain's Economy Sees Zero Growth

Britain's economy plateaued in July, showing zero growth according to official figures released on Friday, echoing economists' predictions. This stagnation followed a buoyant 0.4% rise in June. Year-on-year, July's GDP was up by 1.4%, identical to June's annual growth, albeit slightly below the 1.5% forecast by a Reuters poll.

The first half of 2025 saw an upswing for Britain, with economic growth measured at 0.7% and 0.3% in the year's first and second quarters respectively. This increase was driven by heightened government expenditure and exporters rushing shipments ahead of anticipated U.S. tariffs. However, predictions suggest a deceleration in the latter half due to tariff impacts and a weakening labor market.

Finance Minister Rachel Reeves, addressing concerns on Thursday, remarked that while the British economy isn't 'broken,' it feels 'stuck.' As the November 26 annual budget approaches, she remains hopeful that planned pro-growth initiatives will positively influence the Office for Budget Responsibility's economic outlook.

Despite ministerial optimism, some businesses remain cautious, delaying hiring and investment decisions amid uncertainty over forthcoming employment laws and potential further tax hikes targeting them.

(With inputs from agencies.)