ITV News' Economics Editor Joel Hills tells us how much we should read into these new figures
The UK economy shrunk by 0.5% in July due to strikes and bad weather, according to the Office for National Statistics.
The fall was worse than expected - economists had forecast a 0.2% decline for the month.
It came after a 0.5% monthly increase in June.
This is the biggest decline since December last year and comes amid concerns recent interest hikes and persistent inflation could harm economic growth.
ONS director of economic statistics Darren Morgan said: “Our initial estimate for July shows that GDP fell; however, the broader picture looks more positive, with the economy growing across the services, production and construction sectors in the last three months.
“In July, industrial action by healthcare workers and teachers negatively impacted services, and it was a weaker month for construction and retail due to the poor weather.
“Manufacturing also fell back following its rebound from the effect of May’s extra bank holiday.”
Why has the economy shrunk?
The ONS said all three key areas of the economy – services, construction and production - declined in July.
They say the biggest driver of the slump was lower activity in the services sector, which recorded a 2.1% contraction for the month.
The ONS put this down to strikes by NHS senior doctors and radiographers, as well an increase in walkouts by junior doctors.
The education sector also recorded a 1.1% fall for the month, as the sector was impacted by two days of strikes.
Elsewhere, the retail and accommodation sectors also dipped as consumer sentiment was held back by poor weather.
However, the arts and entertainment industry had a stronger month because of a busy schedule of sporting events and “increased theme park visits”.
ITV News Business and Economics Editor Joel Hills shares his analysis on the latest GDP numbers
Chancellor Jeremy Hunt said: “Only by halving inflation can we deliver the sustainable growth and pay rises that the country needs.
“But there are many reasons to be confident about the future.
“We were among the fastest in the G7 to recover from the pandemic and the IMF (International Monetary Fund) have said we will grow faster than Germany, France and Italy in the long term.”
Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know...