UK economy contracts 0.5 in July, worse than feared
All sectors of economy contract, with strikes weighing
Some economists warn recession may be drawing near
Data does not include recent big upward revisions to GDP

LONDON, Sept 13 Reuters Britain39;s economy contracted in July at an unexpectedly sharp rate after strikes in hospitals and schools as well as unusually rainy weather weighed on output, according to official figures on Wednesday that will add to worries about the outlook.

The Office for National Statistics said gross domestic product shrank 0.5 in July from June, worse than all forecasts in a Reuters poll of economists that had pointed to a contraction in gross domestic product GDP of 0.2 from June.

Output had risen 0.5 in June, and the economy grew 0.2 over the three months to the end of July.

Sterling shed around a third of a cent against the dollar on the data, which showed all major sectors of the economy services, manufacturing and construction declined in July.

The data underlined signs that Britain39;s economy is weakening, perhaps by more than the Bank of England had expected ahead of its September interest rate meeting.

Data on Tuesday showed a faster rise in the unemployment rate than the central bank expected, although the BoE remains worried that strong wage growth will fuel persistent inflation.

The speed of the slowdown could be indicating that recession is around the corner, said Neil Birrell, a fund manager at Premier Miton….