The United Kingdom economy recorded no growth in July, the Office for National Statistics reported Friday.

The flat reading was in line with expectations from economists surveyed by Reuters, following June’s 0.4 per cent expansion.

This comes after the economy grew 0.3 per cent in the second quarter, a slowdown from the stronger 0.7 per cent growth posted in the first quarter.

July’s stagnation was driven by a 0.9 per cent drop in production output, partly offset by slight increases in services and construction activity.

Economists now anticipate that the U.K. economy will slow in the second half of 2025.

“After a surprisingly stronger second quarter, where the U.K. claimed the fastest growth rate among G7 economies, all signs point to a slowdown in economic activity in the second half of the year,” Sanjay Raja, Deutsche Bank’s chief U.K. economist, noted this week.

“A course correction in trade-fronting, stockpiling, net acquisitions of precious metals, and public sector spending, we think, will see U.K. GDP growth slow into the second half of 2025,” he added.

An economic slowdown would deepen the Bank of England’s dilemma as it balances persistently high inflation, which climbed to a stronger-than-expected 3.8 per cent in July— against the upcoming Autumn Budget on Nov. 26, when Chancellor Rachel Reeves is set to unveil her fiscal plans for 2026.