{"text":[[{"start":8.902,"text":"The UK is heading into a slowdown in GDP growth in the second half of 2026, according to the latest forecasts, extending a post-Covid pattern in which robust expansions gradually fizzle out as the year progresses."}],[{"start":23.376,"text":"After expanding by 0.6 per cent in the first quarter and 0.4 per cent in the second — the quickest first-half pace in the G7 — growth will drop to 0.2 per cent in the third quarter, according to the median prediction in a Treasury survey of economists."}],[{"start":39.2,"text":"GDP will expand by just 0.1 per cent in the final months of the year, the survey shows."}],[{"start":45.84,"text":"The forecast deceleration was partly a reflection of inflation heading back above 3 per cent, hitting household finances, alongside fresh uncertainty in the run-up to chancellor John Healey’s first Budget, analysts said."}],[{"start":56.377,"text":"But it will also renew a debate among economists about whether adjustments by government statisticians have been fully correcting for seasonal fluctuations in the numbers."}],[{"start":65.44,"text":"“If you look at monthly GDP this year and compare with the average since 2022 it looks like a very familiar pattern,” said James Smith, an economist at ING bank."}],[{"start":77.04,"text":"“There is definitely something going on . . . it points to a problem somewhere in the seasonal adjustment.”"}],[{"start":null,"text":"
"}],[{"start":81.76,"text":"The Office for National Statistics seasonally adjusts key indicators including GDP to remove systematic calendar-driven effects such as the pre-Christmas shopping dash."}],[{"start":93.44,"text":"“Residual seasonality” refers to persistent seasonal patterns that remain even after adjustments have been applied."}],[{"start":98.606,"text":"The UK’s strong tendency to underperform in the second half of the year emerged noticeably from 2022 onwards, raising questions over possible residual seasonality."}],[{"start":110.21,"text":"In 2025, for example, the economy surged 0.6 per cent in the first three months before losing steam rapidly and finishing the year at a 0.1 per cent quarterly pace."}],[{"start":120.423,"text":"The tendency marks the UK out from peer countries such as the US."}],[{"start":null,"text":""}],[{"start":125.28,"text":"Some economists suspect the figures reflect a series of one-off political and economic factors that have caused activity growth to oscillate, not problems with data quality."}],[{"start":135.92,"text":"For example, the economy’s strength in early 2025 was partly indicative of companies frontloading purchases ahead of the onset of Donald Trump’s “liberation day” tariffs, analysts said."}],[{"start":146.56,"text":"The second half of the year was marked by the chaotic run-up to then Chancellor Rachel Reeves’ second Budget, which gave rise to extreme uncertainty among businesses and households."}],[{"start":156.536,"text":"Other one-off factors also hit the data, including a cyber attack on carmaker Jaguar Land Rover that halted production at its sites for over a month."}],[{"start":167.84,"text":"However, Andrew Goodwin, chief UK economist at consultancy Oxford Economics, said there was evidence that spending had become more loaded into the first quarter since Covid."}],[{"start":176.307,"text":"It would take years for the ONS to determine if there had been a systemic change or if it was just a “flash in the pan”, he said, but he argued that the government’s statisticians may need to correct their seasonal adjustments."}],[{"start":188.08,"text":"The ONS, which is in the process of a turnaround programme to strengthen its economic surveys, published a detailed update on seasonal adjustment in May, in which it gave the data a clean bill of health."}],[{"start":null,"text":""}],[{"start":199.996,"text":"“There is no evidence of residual seasonality,” the agency said in a statement."}],[{"start":204.64,"text":"“We obviously keep this under close review as new data becomes available each month and quarter, particularly in case of any emerging changes.”"}],[{"start":216.08,"text":"The Office for Statistics Regulation, which oversees the ONS, stressed in March that emerging seasonal patterns can take several years to detect using standard methods, so “early signs of change may not yet be visible”."}],[{"start":226.4,"text":"GDP data is hugely sensitive politically, and both government and opposition figures are quick to seize on monthly fluctuations."}],[{"start":234.96,"text":"Healey touted the UK’s strong second-quarter GDP when data was released in August. “We now need to double down and drive growth in every postcode,” he said."}],[{"start":244.369,"text":"Smith said the tendency of UK growth to peter out in the second half had generated “unhelpful” narratives about the country’s economic fortunes."}],[{"start":252.56,"text":"“It feels at the start of the year the narrative is ‘economists have been too pessimistic again’, and then as you head into winter you get into a debate over whether we are heading into a technical recession,” he said."}],[{"start":261.92,"text":"Rob Wood, economist at consultancy Pantheon Macroeconomics, said the probable slowdown in the second half of this year was partly indicative of renewed pre-Budget uncertainty, as households and businesses brace for possible tax increases in October."}],[{"start":276.8,"text":"“Our Budget circus is unique — circus is not an unfair word,” he said. “Other countries have a much more grown-up, organised process around this.”"}],[{"start":282.8,"text":"Paul Dales, UK economist at research company Capital Economics, said that, while the economic picture had been “flattered” by the very strong numbers at the start of the year, the broader outlook remained surprisingly robust given the Iran war-linked surge in oil, gas and electricity prices."}],[{"start":301.86,"text":"He predicted the UK economy would expand by 1.2 per cent over the course of 2026, just shy of last year’s 1.4 per cent. That compares with the UK’s potential growth rate of about 1.5 per cent, according to the Office for Budget Responsibility, the fiscal watchdog."}],[{"start":318.396,"text":"“The main story is the economy has been surprisingly resilient to the energy price shock; it is a moderately positive story,” Dales said."}],[{"start":328.64,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1788257993_7791.mp3"}