Latest UK GDP figures show continued strain for the economy

"After a weak showing in April, this month’s GDP data is another bitter pill for the Chancellor. The UK’s finances were already showing real strain, and this leaves the Chancellor with more holes to fill. It is the fiscal equivalent of whack-a-mole – every time Rachel Reeves solves one problem, another emerges.

"Real challenges lie ahead. The Government’s failure to push through welfare cuts has blown a hole in its budget likely to be filled by tax rises in the Autumn. While there remains considerable speculation on what those tax rises might be, they could slow UK economic growth even further.

"The UK economy also continues to struggle with a lack of confidence. While many households have more disposable income thanks to wage increases that have outpaced inflation, large numbers remain hesitant to spend. A more optimistic take is that the UK still has the capacity to turn its fortunes around. It just needs a period of stability, but that has proved elusive.

"The prospect of tax rises should prompt households to ensure their savings are in tax sheltered accounts. There remains considerable speculation that there could be changes to the ISA or pension rules in the budget. Savers may want to look to take advantage of their tax free allowances in the event of any changes."