Gavin Grey: UK correspondent on the UK economy flatlining again in July

The UK economy unexpectedly failed to grow in July, after flatlining in June, for the second month in a row.

Analysts had originally forecasted a slight growth of 0.2 percent.

UK correspondent Gavin Grey says drops in the manufacturing and construction sectors contributed to the downturn.

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Episode Transcript

Speaker 1 (00:00):
UK corresponding Gavin Grays with us evening to you, Gevin
Hi there. So we were not expecting the UK economy
to flatline. We were expecting tiny bit of growth.

Speaker 2 (00:08):
What happened, Yeah, big disappointment. Just announced within the last
hour that the UK economy just basically flatlined for the
second month in a row. Analysts have thought there'd be
a slight growth to GDP of zero point two percent.
So what went wrong. Well, we're being told there is
longer term strength in the services sector, so there should

(00:31):
be a growth over the last three months as a
whole and into the future. But it's other things that
have brought the figures down, so really honing down more
precisely on what they reckon. The growth was led by
computer programmers and the health sector, which recovered from strike
action back in June, but there were falls in advertising companies,

(00:53):
architects and engineers, with manufacturing crucially falling overall, with a
particularly poor month for car and machinery firms. Construction industry
also suffered badly. So yeah, the government going to look
at this. I'm going to think, well, you know, we're
still looking back at the previous administration of the previous government,

(01:14):
and indeed the UK did have the highest growth rate
for the first six months of twenty twenty four among
the group of G seven nations. But I think a
second line of flatlining will be of some concern to
those in government.

Speaker 1 (01:27):
Devin, Listen, This Apple tech situation in Ireland is fascinating.
Am I reading this right? That Ireland actually doesn't want
the text money.

Speaker 2 (01:35):
Yes, so this is quite a complex story and it
goes back over some eight or more years. But originally
when the company Apple headquartered its business for Europe, Middle
East and that sort of region, they decided to go

(01:55):
to Ireland for it. Why well, because Ireland was offering
massive tax discounts, and indeed it was said that that
had been a bigger incentive to lure big companies away
from countries like the UK and the rest of the EU.
And boy it worked. Suddenly Dublin was springing up with
a whole load of huge multinational companies headquartering their regional

(02:18):
offices in Dublin. But the Irish government gave these tax
advantages to Apple. The European top Court said it was illegal.
The Irish government said, well, we don't want the tax
back and we don't think it's illegal, but after all
the toing and throwing, Apple indeed had been ordered to
pay Ireland roughly twenty four billion New Zealand dollars in

(02:42):
unpaid taxes. The Irish government has said it will respect
the ruling. The ruling incident, it was because effectively no
other company was being given the tax advantages that Apple
were being given, so they said that was unfair. As
I said, though for the period of time it's taken
to discuss this, with the original decision covering the period

(03:03):
nineteen ninety one to twenty fourteen, then an appeal on it.
As you can imagine, plenty of others have tried to
take advantage of that particular scheme in Ireland.

Speaker 1 (03:12):
It's good to talk to you, Gevin, as always, Thank
you so much. Devin Gray are UK correspondent.

Speaker 2 (03:17):
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