LONDON, Sept 11 Reuters Britain39;s economy stagnated for a second month running in July as manufacturing output dropped sharply, an inauspicious start for the new government of Prime Minister Keir Starmer who wants to vastly improve the country39;s growth rate.

Economic output showed no change in monthonmonth terms in July, as it did in June, data from the Office for National Statistics showed on Wednesday.

A Reuters poll of economists had pointed to a 0.2 monthonmonth expansion of gross domestic product.

The figures are unlikely to sway expectations that the Bank of England will cut interest rates once more this year, probably in November rather than on Sept. 19.

Modest growth in the services sector, which expanded by 0.1 in July, was offset by declines in manufacturing and construction.

I am under no illusion about the scale of the challenge we face and I will be honest with the British people that change will not happen overnight, finance minister Rachel Reeves said in response to the data.

She pointed to the announcement on Wednesday that Amazon Web Services plans to spend 8 billion pounds 10.45 billion in the United Kingdom over the next five years to build data centres as a reason for optimism.

Britain39;s economy has grown slowly since the COVID19 pandemic, expanding just 2.3 between the fourth quarter of 2019 and the second quarter of 2024.

Economic output was 1.2 higher than its level in July 2023, the ONS said lower than the 1.4 growth predicted by…