The ONS has spoken: GDP in July was flat. Zero growth. In June it had managed 0.4%. Year-on-year, 1.4%. The Guardian called it “grim news” for Rachel Reeves, as though this were merely another episode of political weather to be endured by the Chancellor. But the real story isn’t July’s flatline. The real story is the long unravelling of British capitalism, a saga now so familiar that the newspapers have had to reduce it to bland bullet points.
The Misfiring Engine
Read the business pages and you’ll find the same metaphor recycled every month: the economy is a machine, temporarily misfiring. Replace the spark plugs, add a squirt of fiscal oil, and it will roar back into life. This is the great Westminster superstition—that prosperity is always around the corner, waiting for the right technician with the right wrench. Yet what we see is not misfiring but terminal decline. Services limp forward, construction plods, and manufacturing continues its long retreat into memory.
Britain no longer makes much worth selling. The factories were shuttered long ago, gutted in the Thatcher years and abandoned by every government since. What remains is finance, property, and services—the tollbooth economy. Or to echo Grace Blakeley the “financialisation of the everyday”. Finance skims from global flows, property extracts rent, services commodify daily life. But when the toll-paying public is broke, growth dies.
A History of Stagnation
The decline is not new. It is chronic. In 1973 Britain grew by 6.5%—a high-water mark before the oil shocks, before deindustrialisation, before the neoliberal counter-revolution. Thatcher claimed to have unleashed dynamism, but her miracle was fuelled by North Sea oil and a bonfire of productive industry. The 1980s produced profits for some, but not growth that lasted.
The 2008 crash laid bare the fragility. GDP fell by 4.6%—the deepest fall in the postwar record. The 2020 Covid collapse doubled it: a staggering 10.3% contraction. Since then, the figures resemble a heart monitor: brief spikes followed by flat lines. In 2021, a rebound of 8.6%. In 2022, 4.8%. By 2023, 0.4%. Now, in 2025, we celebrate if we can scrape 1%.
Flatline GDP is not a pause, it is the lived reality of a system in decline.
The Human Numbers
GDP per head has been falling for two years. That is the number that matters, though it rarely makes the headlines. People feel poorer because they are poorer. Wages stagnate. Rents and mortgages punish. Inflation lingers like a hangover. Energy bills never really returned to earth. Growth without redistribution is a hollow number; stagnation with inflation is a slow asphyxiation.
The July breakdown makes the point clearly. Services ticked up, mostly through squeezing more out of insecure labour. Construction grew modestly, but speculative towers are not homes. Production fell, dragged down by manufacturing and energy supply. This is not an economy regenerating. It is one cannibalising itself.
The Official Chorus
Yet still the dominant class dare not admit it. So we hear the same dreary chorus: “sluggish demand,” “weak productivity,” “confidence must be restored.” Confidence (always bloody confidence)as if the problem were psychological, a failure of collective nerve. What they mean by “confidence” is obedience: obedience to markets, obedience to capital, obedience to decline itself.
Reeves mouths her script about “prudence,” which in practice means reassuring the financiers who thrive on stagnation. She will play accountant to decay, measuring out cuts and compromises with all the gravity of a Victorian bookkeeper. Stagnation is not a policy failure for her. It is the policy.
Stagnation is not a blip but the endgame of neoliberalism.
The International Setting
Elsewhere, the picture is no more flattering. Germany slides toward recession. France falters. Trump’s tariffs are tearing through supply chains, making even America’s allies collateral damage in his nationalist crusade. Global capital searches for profits and finds only diminishing returns. In that sense, Britain’s flatline is not exceptional, it is exemplary. We are the test case of a capitalism past its prime.
The Unravelling
The commentators, ever obedient, maintain a straight face. They talk of “sluggish growth” as if Britain’s salvation lay in more service-sector drudgery, more financial alchemy, more rentier speculation. They are too polite to name the corpse.
But the corpse is there, on the table, and the July figures are just another autopsy report. This is not a pause before recovery. It is the long death of a system that has outlived its usefulness.
We are living not through a pause, but through the managed decline of British capitalism.
Yet Reeves and her colleagues in the treasury insist on administering aspirin to the terminal patient. A tweak here, a headline-grabbing scheme there, all the while refusing to confront the underlying disease. For the working class, it means another lost decade, another round of hollow promises. For the commentariat, it means another opportunity to spin stagnation as a “challenge” rather than what it is: collapse, hidden in plain sight.
