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Clive Bull 1am - 4am
13 September 2023, 07:15 | Updated: 13 September 2023, 07:50
The economy shrank by 0.5% in July, a worse decline than economists had anticipated.
Strikes by healthcare workers and teachers was blamed for the slowdown, as was bad weather.
Economists had forecast a 0.2% decline for July.
The Office for National Statistics (ONS) said the half-a-percentage-point contraction came after a 0.5% increase in gross domestic product in June.
Darren Morgan, the director of economic statistics at the ONS, said: "Our initial estimate for July shows that GDP fell; however, the broader picture looks more positive, with the economy growing across the services, production and construction sectors in the last three months.
"In July, industrial action by healthcare workers and teachers negatively impacted services and it was a weaker month for construction and retail due to the poor weather.
"Manufacturing also fell back following its rebound from the effect of May's extra Bank Holiday.
"A busy schedule of sporting events and increased theme park visits provided a slight boost."
Chancellor Jeremy Hunt said: "Only by halving inflation can we deliver the sustainable growth and pay rises that the country needs.
"But there are many reasons to be confident about the future.
"We were among the fastest in the G7 to recover from the pandemic and the IMF (International Monetary Fund) have said we will grow faster than Germany, France and Italy in the long term."
It comes a day after the ONS published figures showing wages grew ahead of inflation in July after months of soaring prices.
It is the first time in more than a year that pay has caught up with price rises.
Average earnings grew by 7.8% before bonuses were taken into account in the three months to July.
That is ahead of the consumer price index (CPI), one of the methods of measuring inflation, which fell to 6.8%.