THE UK economy grew in July, official figures show, easing worries of a fall into recession in the current quarter, but experts flagged continuing dangers amid Brexit fears.

Data published yesterday by the Office for National Statistics showed UK gross domestic product grew by 0.3 per cent month-on-month in July. Comparing the May to July period with the preceding three months, the UK economy stagnated.

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ONS figures last month showed UK GDP fell by 0.2% in the second quarter and a raft of weak economic surveys have signalled a danger of the economy falling into recession in the three months to September.

Howard Archer, chief economic adviser to the EY ITEM Club think-tank, said: “GDP growth of 0.3% month-on-month in July looks to go a long way towards guaranteeing that the economy will return to growth in the third quarter. But disappointing survey evidence for August relating to manufacturing, construction and services activity as well as retail sales suggests that the economy is currently finding life challenging as it is hampered by serious uncertainties relating to Brexit, the domestic political situation and the global economy.”

The EY ITEM Club forecasts third-quarter UK growth of 0.3%. It projects 1.2% expansion over 2019 as a whole, which would be the UK’s weakest performance since 2009.

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Mr Archer said that, should the UK leave the European Union without a deal on October 31, the think-tank believed GDP growth would be likely to come in at just 0.3% in 2020, “with the economy at risk of suffering stagnation or even mild recession over the first half”.

The National Institute of Economic and Social Research projected third-quarter UK economic growth of 0.3%, in the wake of yesterday’s monthly GDP figures.

Garry Young, director of macroeconomic modelling and forecasting at the NIESR, said: “It looks like there has been a welcome resumption of economic growth in the third quarter, roughly offsetting the fall in the second quarter. But it is not clear how long growth will continue."

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He added: “Only the services sector is expanding, primarily to meet higher demand from consumers driven by increased household incomes fuelled by rising real wages.

"But there is a limit to how much further real wages can grow without a pick-up in investment and productivity, and this seems unlikely in the near term.”