The UK economy has been negatively affected by doctor strikes in July, while the retail sector showed lower output due to wet weather.
The monthly gross domestic product (GDP) figures for July recorded a 0.5 percent drop in services, production, and construction.
The services sector, which includes health and social work, saw a 0.5 percent drop in July and was the main contributor to the fall in GDP for the month overall.
The Office of National Statistics (ONS) attributed this to the impact of industrial action held by NHS senior doctors and radiographers, as well as junior doctors.
The end of July also saw radiographers go on strike for two days after unsuccessful discussions with the government.
Patients missed more than 167,000 appointments and procedures because of the senior and junior doctor strikes and the GDP health sector fell by 2.1 percent.
Teachers also went on a strike in July for two days after rejecting the government’s salary rise offer in April. Rail workers took three days of strikes, which saw 20,000 members from 14 train operating companies walk out.
Retail and Construction
Retail sales suffered from heavy rainfall in July. The Met Office reported it to be the wettest July since 2009.Poor weather also affected output in construction, where businesses saw a 0.5 percent decrease.
“This follows a 1.6 percent increase in June 2023, where businesses told us that extremely good weather and an additional working day, compared with May, because of the additional bank holiday for King Charles III coronation, had boosted output,” the ONS reported.
Another sector that contributed negatively to the July GDP was production, where the output fell by 0.7 percent.
Broader Picture
Despite the monthly decline in many industries, the broader GDP picture remained more positive. In the three months to July, GDP increased by 0.2 percent with growth in all production, construction, and services.The economy seems to be still growing, albeit fractionally, said James Smith, developed markets economist at the ING group.
“The change in activity over the past three months relative to the three months before is still slightly positive. We think the economy is likely to more or less flatline over coming quarters—and a mild recession can’t be ruled out,” Mr. Smith said.
It comes ahead of a Monetary Policy Committee meeting, where the Bank of England will vote on interest rates. The rates are expected to increase from 5.25 percent to 5.5 percent in an effort to keep up with the historically high inflation.
Apart from the inflationary pressures, the UK economy is set to be affected by another wave of industrial action this autumn. September has kicked off with train and train driver strikes, forcing rail companies across England to cancel all services.
The British Medical Association has announced that in September and October, junior doctors and consultants will hold a joint strike for the first time in the history of the NHS.
