#manufacturing-slump

#manufacturing-slump

"The German economy is starting the new year with little momentum," said Ifo president Clemens Fuest. Hammered by a manufacturing slump, fierce competition in key export markets and US tariffs, the German economy has been mired in a long decline. After meagre growth in 2025 following two years of recession, some have been banking on the turnaround picking up speed sharply this year driven by a public spending blitz.

The latest GDP figures, released on Friday, highlight the scale of the challenge for Reeves at her autumn budget. Growth flatlined in July, slowing from 0.4% in June, as the economy struggled for momentum over the summer. Some of the weakness can be explained away. Most economists had anticipated a slowdown after Britain recorded the strongest growth in the G7 in the first half of the year.