IoD press release Businesses will be reassured that the economy grew in July

Commenting on ONS data that shows monthly GDP grew by 0.2% in July 2022, Kitty Ussher, Chief Economist at the Institute of Directors, said:

“Given all the talk of recession, businesses will be reassured to hear that the economy grew in July, at around its long-term trend rate. When looking at the last three months together, it shows the economy flatlining as the impact of higher inflation works its way through the system.

“Consumer spending was reasonably strong, as hot weather, a strong sporting schedule and holiday bookings boosted retail and recreation activities.

“Set against this is weakness in some parts of the manufacturing sector, although it is notable that this is concentrated in pharmaceutical production which would be expected to be more volatile coming out of a pandemic. The data also shows early signs of reduction in demand for energy, possibly because of the higher prices.

“The key judgement the Bank of England will make when it meets on Thursday is whether an essentially flat economy is sufficient to squeeze homegrown inflation out of the system or whether further tightening is needed.”

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