Manufacturing slump sees economy flatline

THE UK economy flatlined in July after the manufacturing sector saw the biggest contraction for a year.

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The Office for National Statistics (ONS) said there was zero growth in gross domestic product (GDP) month on month in July, against 0.4% growth in June.

While most economists had expected zero expansion, it adds to mounting pressure on the Government, which set itself a key priority to boost economic growth.

Attention is now focused on the November 26 Budget, with speculation mounting that Chancellor Rachel Reeves may raise taxes to fill a black hole.

The pound slumped after the data, falling 0.3% to 1.354 US dollars and 0.2% lower at 1.155 euros yesterday.