GDP increased by 0.2% in July, the latest data from the Office for National Statistics (ONS) shows, as the UK economy saw a smaller amount of growth than predicted.
In June the economy shrank by 0.6% in June, as the extra bank holidays to mark the Platinum Jubilee hit economic output.
Construction also fell in July 2022 by 0.8%, after a fall of 1.4% in June 2022; with the decrease in monthly construction output in July coming solely from repair and maintenance, which fell 2.6%.
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Graham Cox, founder of the Bristol-based Self-Employed Mortgage Hub:
“My biggest concern regarding the economy right now is the possibility of a run on the Pound. Some analysts are predicting sterling could soon reach parity with the US dollar.
“With oil and gas imports priced in the greenback, that would be highly inflationary in the short term and a disaster for the economy.
“There’s no denying business confidence is at rock bottom right now. But often things aren’t as bad as they first seem, and I suspect inflation will start falling just as quickly as it’s risen.”
Lewis Shaw, founder of Mansfield-based Shaw Financial Services:
“Despite the government freezing the energy price cap at £2,500, it’s still almost double the price of energy in October 2021, when it was set at £1,277. At that lower rate, we had over three million people in fuel poverty.
“So how many people will this government push further under the water when the price rises to £2,500? For many, the cost of living crisis is a far more significant threat than the pandemic.
“If your wages aren’t rising, yet the cost of everything else is, it doesn’t take a genius to determine what happens next. Consumer demand will fall, and high street activity will shrink, forcing businesses to lay off staff because of dwindling profits and soaring costs.
“Add into the mix rocketing mortgage rates, and you’ve got a perfect storm. Sadly for the UK, the ship’s captain thinks more Government debt, increased cheese production and new pork markets will fix things. What a time to be alive.”
Rob Peters, director of Altrincham-based Simple Fast Mortgage:
“The rising cost of living and stagnant wages are two of the biggest challenges at present. It doesn’t take a rocket scientist to calculate that if costs go up, but wages don’t, then more people will face poverty.
“This will become more apparent in the coming winter months when energy usage is at it highest. Even with the new energy price guarantee, many will still face vastly increased costs that they cannot afford.
“Charities and food banks should expect increased demand for their services this winter as people look for ways to feed and clothe themselves and their families.
“For businesses, I expect to see a large retreat from the high-street as small businesses look for ways to reduce overheads and a physical shop is a costly overhead.
“The number of business failing due to the cost of materials will also increase. But it’s not all doom and gloom. Many will innovate and produce creative and successful alternative businesses.”
Richard Pike, chief sales and marketing officer at Phoebus Software:
“We have seen a 0.2% uplift in GDP in July, but unfortunately a lot of this will be ironically, and sadly, attributed to the Queens Platinum Jubilee celebrations.
“The funeral on Monday is likely to have a reverse effect on GDP and so it does remain to be seen whether we technically hit a recession sooner rather than later. The oil price cap seems to be affecting the markets positively with prices lowering and this hopefully will assist the long-term situation.
“Even though we are in a weeks’ mourning, there are a number of economic statements and announcements that will go ahead this week and that will shape the Bank of England’s rate decision in key areas such as employment, inflation and retail sales figures.
“Widely a 0.5% increase rate increase is expected and this is only going to squeeze many people’s household budgets, especially those on variable rates.
“The credit industry is seeing an upward shift in collections activities and this is only likely to continue for the foreseeable future.
“Those institutions with automation of manual tasks and borrower self-service will see the benefit of their investment in these areas, allowing collectors to speak with those borrowers that are more complex or in need of a more hands on approach to their circumstances.”
