LONDON, United Kingdom: UK GDP figures for July are expected to show a 0.1% monthly contraction, as weak retail sales and higher household energy bills weighed on activity, economists forecast.
Investec and Pantheon Macroeconomics both expect the Office for National Statistics to report the decline when it publishes official July GDP data on September 11.
The forecast follows 0.3% growth in June, when hospitality and leisure businesses benefited from hot weather and football tournaments. That increase helped the economy expand 0.4% during the second quarter.
Investec said some June spending may have been brought forward from July. It also pointed to weaker retail activity and a 13% increase in the household energy price cap as factors likely to have restrained growth.
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Pantheon Macroeconomics economist Robert Wood also forecast a 0.1% monthly decline. He expects economic growth to slow to 0.2% across the third quarter.
Retail and wholesale output is expected to have fallen 0.3% in July. However, accommodation and food services likely strengthened because of hot weather and World Cup-related spending.
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RSM UK chief economist Thomas Pugh said households appeared to shift spending rather than increase it overall. Retail sales fell 0.5%, while pubs, restaurants and hotels benefited from England’s World Cup run.
