LONDON — The British economy continued to stagnate in July compared to the previous month, according to preliminary figures from the Office for National Statistics released on Wednesday.

Gross domestic product (GDP) fell short of the expectations of economists surveyed by Reuters, who had forecast growth of 0.2 percent.

The country also did not record any GDP growth in June.

Britain’s main services sector showed slight growth of 0.1 percent in the months to July, while manufacturing and construction output fell by 0.8 and 0.4 percent respectively.

UK economic growth rose 0.5 percent in the three months to July, slightly below economists’ expectations and the 0.6 percent recorded in the second quarter to June.

“The economy recorded no growth for the second month in a row, although longer-term strength in the services sector meant there was overall growth over the last three months,” said Liz McKeown, director of economic statistics at the ONS.

The British economy has recorded modest but steady growth almost every month so far this year, after emerging from a mild recession at the beginning of the year.

The reading is the first under Prime Minister Keir Starmer’s new Labour government, which was elected on July 4.

Finance Minister Rachel Reeves said the publication of the print version left her with “no illusions” about the challenges facing the British economy.

“I will be honest with the British people and say that change will not happen overnight. Two quarters of positive economic growth cannot make up for fourteen years of stagnation,” Reeves said.

This comes ahead of the upcoming Autumn Statement on October 30, when Reeves will present her annual budget. She has already warned it will be painful after she said she inherited a £22 billion ($29 billion) hole in the public finances from the former Conservative government. Her predecessor, Jeremy Hunt, has denied the claims, calling the alleged black hole “fiction”.

Lindsay James, investment strategist at Quilter Investors, said the prospect of tax increases could further deter consumers from spending in the coming months.

“Tax increases were announced ahead of the autumn budget and consumers and businesses may be a little more cautious over the winter months while they wait for details from the Treasury,” she said.

But she added that further interest rate moves from the Bank of England could help ease broader growth pressures. The central bank will meet next week to make its latest monetary policy decision after cutting interest rates for the first time in four years last month.

“However, given the recent positive signs for the broader economic situation, this month may just be a blip, particularly given that we continue to expect rate cuts in the coming year,” James noted.