Today we heard that the UK economy contracted by 0.5% in July, this has been associated with striking teachers, radiographers and doctors, plus wet weather which had a negative impact on construction and retail markets.
The UK consumer confidence index for July took a tumble but lifted in August from -30 to -25. Will this reflect positively in the Office for National Statistics report on the economy for August?
In the UK services were down by 0.5%, Construction by the same, Production though was down by 0.7%.
Production is generally linked to demand and orders. It is unlikely that the striking or weather conditions in July impacted the production figures in this way, July production weakness is more likely to be reflective of orders earlier in the year.
July’s strikes and the poor weather that rolled into August, combined with a reduction in demand prior to July would suggest that the figures for August may not be positive either.
With continuous pressure from higher levels of inflation, reduction in disposable income from increases in interest rates and rising levels of unemployment there are plenty of challenges ahead.