It would represent a downbeat start to the leadership of Andy Burnham, who was appointed Prime Minister during the month.
The UK economy is likely to have shrunk slightly in July due to pressure from weak retail sales and increased energy costs for households, economists have warned.
Experts at Investec and Pantheon Macroeconomics have predicted that the Office for National Statistics will reveal UK GDP fell by 0.1% for the month when it releases the latest growth data on September 11.
It would represent a downbeat start to the leadership of Andy Burnham, who was appointed Prime Minister during the month.
In June, the UK economy grew 0.3% as hospitality and leisure firms received a boost from football fever and the prolonged hot weather.
It meant the economy expanded by 0.4% during the second quarter of the year.
However, economists have predicted that there is now likely to be a correction as stronger-than-expected June activity may have brought forward spending from July.
Investec analysts said: “After a positive first half of the year, where the UK economy actually outperformed the rest of the G7, growing by 1%, we expect the third quarter will begin with a weaker performance.
“Some evidence of this has already been seen in soft retail sales for the month, whilst we expect the rise in household utility bills due to the 13% uplift to the energy price cap would have had a dampening effect.”
Pantheon Macroeconomics’ Robert Wood also pointed to a 0.1% decline for July and predicted that growth in the third quarter will slow to 0.2%.
He said large parts of the services sector are likely to have witnessed declines and drag on the overall performance of the economy.
Retail and wholesale activity is likely to have slid by 0.3% for the month but this will be more than offset “a surge in accommodation and food services output in July” amid a boost from the World Cup and hot weather.
Thomas Pugh, chief economist at RSM UK, added: “Services are likely to have been a tale of two consumers.
“England’s World Cup run should have delivered a strong month for pubs, restaurants and hotels, but a 0.5% fall in retail sales suggests households changed where they spent, rather than opening their wallets wider, spending more money over the bar, but less at the tills.”
