The UK economy was flat in July with the Office for National Statistics reporting zero growth in GDP month on month in July, compared to 0.4% growth in June.

The figures won’t please the Government, which has set itself a key priority to boost economic growth.

Liz McKeown, ONS director of economic statistics, said: “Falls in production were driven by broad-based weakness across manufacturing industries.”

Scott Gardner, investment strategist at JP Morgan-owned digital wealth manager, Nutmeg, said: “Few positives can be found from this latest batch of GDP data with UK economic growth coming to a standstill during July and little sign of expansion across any of the key industries that make up the monthly reading.

“If growth is the top priority, the economy’s recent sluggishness is bad news ahead of the upcoming Budget. Key will be unlocking growth in the housing sector, which has seen a slowdown in recent months as speculation around new taxes in the Budget mount and housebuilding remains underwhelming.”

The upcoming Budget is due to be revealed on 26 November, with speculation mounting that Chancellor Rachel Reeves may have to raise taxes to fill a black hole in the nation’s finances.

Lindsay James, investment strategist at Quilter, said: “Speculation is already rife about which taxes will be raised, and without the ability to raise the main revenue generators – income tax, national insurance and VAT – the government is left with targeting multiple sectors for small amounts of revenue.

"This is increasing the headwinds for the UK economy and with still over two months to go, GDP readings for the second half of the year are unlikely to pretty reading. For government under as much pressure as it is at the moment, this will be a very difficult corner to get itself out of.”

The latest data comes ahead of the Bank of England’s next interest rate decision on 18 September.

Luke Bartholomew, deputy chief economist, at Aberdeen said: “The key questions for the Bank of England though are more about inflation than growth right now, so this report is unlikely to change much in the way of the Bank’s thinking. We still expect one more interest rate cut later this year, but this is looking a finely balanced call.”