UK economy shows strain from surging prices

STORY: Rising energy prices were among factors that sapped UK growth in July.

Official data showed Monday (September 12) that gross domestic product grew by 0.2% from June - about half the rate forecast by analysts.

Fuel costs were partly to blame, as they rose by more than half over the 12 months to July and pushed down demand for electricity.

The energy crisis led to new Prime Minister Liz Truss announcing a cap on domestic energy tariffs last week.

That has lowered the risk of a severe hit to the economy starting later this year, though it will cost around $116 billion for the UK's already stretched finances.

Last month, the country's central bank forecast the economy would slip into recession at the end of this year.

It also said it would likely not come out of it until early 2024 - with energy prices a key driver of that.

Despite the slowing economy, the Bank of England is expected to raise interest rates again on September 22. as it tries to fight an inflation rate above 10%.

Services output grew by a monthly 0.4% in July, but industrial production dropped.

The construction sector's output also fell, due largely to the rising cost of materials.