Political turbulence, including the resignation of Deputy Angela Rayner and the sacking of ambassador Peter Mandelson, reflects instability within the ruling Labour Party, complicating economic policy efforts.

The government attributes some economic weakness to underinvestment, but recent policy decisions have also added headwinds to recovery, despite claims of progress through initiatives like interest rate cuts and infrastructure investments.

Uncertainty around the upcoming budget and potential tax hikes is discouraging business investment and hiring, with the CBI emphasizing the need for growth-focused policies.

The UK economy experienced no growth in July, following a 0.4% increase in June, with manufacturing contracting by 1.3%, marking the largest decline in a year and contributing to overall stagnation.

Economic outlook remains uncertain due to political and fiscal tensions, with upcoming government budget announcements expected to consider tax hikes to address fiscal deficits amid criticism from opposition and analysts.

The Bank of England is scheduled to decide on interest rates on September 18, balancing concerns over sluggish growth and persistent inflation, with expectations of a potential rate cut at the November 6 meeting.

Finance Minister Rachel Reeves is focusing on streamlining tax measures to stimulate recovery, amid warnings that further tax hikes could dampen investment and consumer spending.

Business leaders warn that increased taxes and austerity measures could hinder economic growth, with bond markets closely monitoring government finances.

Critics from the Conservative and Reform UK parties argue that current strategies have made Britain poorer and accuse Labour of mismanagement, intensifying political debate over economic direction.

Government officials acknowledge the economy is 'stuck' but not broken, emphasizing efforts to reverse years of underinvestment through policy changes aimed at stimulating growth.

The Treasury highlights that stagnation stems from years of underinvestment, but claims progress is being made through their Plan for Change, including interest rate cuts, wage increases, and infrastructure investments.

The British Chambers of Commerce urges the government to avoid increasing taxes in the upcoming budget, advocating instead for policies that boost growth and productivity.