Economic Stagnation Challenges UK Under PM Starmer

Britain's economy showed no growth for the second month in a row in July, with a sharp drop in manufacturing output. Prime Minister Keir Starmer's government faces challenges in accelerating growth. Investors expect the Bank of England to cut interest rates later this year, with eyes on upcoming economic policies.

In a troubling sign for Prime Minister Keir Starmer's new government, Britain's economy stagnated in July for the second consecutive month as manufacturing output saw a significant decline. Data from the Office for National Statistics revealed no change in economic output, unchanged from June's figures.

The results fell short of economists' expectations, who had predicted a 0.2% growth. This persistent stagnation increases the likelihood of the Bank of England cutting interest rates later this year, likely in November. The services sector recorded a modest 0.1% growth, which was counteracted by declines in manufacturing and construction.

Finance Minister Rachel Reeves acknowledged the challenges lying ahead but highlighted Amazon Web Services' planned investment of 8 billion pounds in UK data centers as a positive sign. Despite the slow growth, eyes remain on the upcoming budget and its potential to secure sustained economic improvement.

(With inputs from agencies.)