The UK economy’s recovery slowed in July as growth inched up just 0.1pc for the month, far lower than expectations of 0.7pc as shortages of raw materials dragged on Britain’s bounce back.
The construction industry shrank by 1.6pc to mark its fourth month of decline in a row of amid rising costs and a shortage of materials leaving it 1.8pc below its pre-pandemic level.
The manufacturing sector failed to grow and services growth was flat as sharp falls in retail and law were offset by growth in IT, financial services and the events industry.
The reopening of an oil field boosted growth as production output grew 1.2pc, while the end of social distancing boosted arts, entertainment and recreation activities by 9pc.
“After many months during which the economy grew strongly, making up much of the lost ground from the pandemic, there was little growth overall in July,” said ONS deputy national statistician, Jonathan Athow.
“Oil and gas provided the biggest boost, having partially bounced back after summer maintenance. Car production also continued to recover from recent component shortages.
“Rising costs and shortages of raw materials pegged back the construction sector again.”
5 things to start your day
1) EasyJet rejects takeover bid from budget rival Wizz Air EasyJet’s bid to repair its finances and compete in the post-Covid travel market via a £1.2bn cash call has been overshadowed by the revelation that it has rejected a takeover approach from a rival.
2) Gene-edited, virus-resistant super pig moves a step closer to market A British science business has moved a step closer to selling a genetically edited super pig that is resistant to a deadly virus after reporting successful clinical trials.
3) Ireland freezes power exports to UK as energy costs rocket tenfold Ireland has been forced to freeze power exports to the UK to prevent a shortage which could have sparked blackouts as surging energy prices continue to cause chaos across Europe.
4) Ikea to open flagship Oxford Street store at site of shuttered Topshop Ikea is to buy the flagship Oxford Circus store occupied by Topshop in a £385m deal following the collapse of Sir Philip Green’s retail empire.
5) The City has a duty to get young staff back in the office, says Lloyd’s boss City firms have a duty to get staff back into the office so that younger employees can develop their careers and learn from senior colleagues, the boss of Lloyd’s of London has said.
What happened overnight
Asian shares rallied on Friday after two days of losses, but were still in a nervous mood as global investors grapple with how best to interpret central banks’ cautious moves to end stimulus, which also left currency markets quiet.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.47pc in early trading, but is still down around 0.8pc compared to last week’s close, in line with the global trend.
Japan’s Nikkei rose 0.25pc, and US stock futures, the S&P 500 e-minis, were flat.
Australia gained 0.4pc as mining stocks rose after aluminium prices hit multi-year highs, and Chinese blue chips also advanced 0.5pc.
But gains were led by Hong Kong with the local benchmark rebounding 1.5pc having fallen over 2pc the day before when Chinese tech stocks took another battering after authorities called gaming firms in for a word. But traders are still cautious about buying too much of the dip.
Coming up today
- Corporate: Ricardo (Full year)
- Economics: July GDP, industrial output (UK), CPI (Germany), producer prices (US)