Cooling Growth, Rising Costs: UK Recovery Slows as Fiscal Pressures Build

NatWest’s July 28 Economic Briefing reviews signs of sluggish UK growth, fiscal stress, and mixed global momentum, amid persistent inflation and cautious consumer sentiment.

• UK fiscal strain deepens: Public borrowing hit £20.7bn in June—its second-highest on record—driven by surging debt servicing and stubborn inflation.

• Growth soft but stable: Composite PMI dipped to 51.0 as services weakened; Q3 GDP looks set for only modest expansion.

• Global backdrop uneven: U.S. growth surprised positively while eurozone confidence rebounded, aided by improving PMIs and a tentative trade truce with the U.S.

How will mixed macro signals shape policy expectations and portfolio positioning into autumn? The full report provides detailed analysis across sectors and regions.