Commenting on ONS data that showed monthly GDP falling by 0.5% in July 2023 Kitty Ussher, Chief Economist at the Institute of Directors, said:

“July’s negative GDP data is consistent with our own surveys that show a worsening in the overall business environment around the middle of the year. Today’s data supports our call for the Bank of England to keep interest rates steady next week to give time for its medicine to work rather than risking an overdose.

“There were some one-off factors that constrained the economy in July, notably industrial action that reduced public sector output, and also wet weather that reduced retail sales and construction activity. However, neither of these factors explain other weaknesses such as in ICT, administrative services and manufacturing. Overall, today’s data should give the Bank of England pause for thought when it meets next week.”