UK Economy Set to Contract by 0.1% in July Amid Energy Price Hikes

The UK economy is expected to contract by 0.1% in July due to rising energy bills and weak retail sales, according to economists at Investec and Pantheon Macroeconomics.

The 13% increase in the household energy price cap has had a dampening effect on consumer spending, with official data showing seasonally adjusted retail sales volumes fell by 0.5% month-on-month in July.

The expected contraction would mark a subdued opening to Andy Burnham's premiership, which began after he replaced Keir Starmer in the second half of the month.