UK economy shrank 0.5% in July, stoking recession fears

The news: The United Kingdom's GDP shrank 0.5% in July, with manufacturing, services and construction all contracting for the first time since mid-2022.

The numbers: The 0.5% drop was worse than the 0.2% fall predicted by analysts, and a reversal from 0.5% growth in June. The pound lost 0.3% against the greenback within a minute of the data print and is fetching USD1.24 ($1.94). The GBP has lost about 5% against the US dollar since hitting a 15-month high on 13 July.

The context: Industrial action and extremely wet weather contributed to the UK's economic shrinkage, according to official figures, and have raised fears of a recession in the second half of 2023.