UK economic system did not develop in third quarter in recent blow for Labour | EUROtoday

The UK economic system was stagnant within the first three months of the brand new Labour authorities, statistics from the ONS have revealed, recording no development within the third quarter.

The Office for National Statistics (ONS) had beforehand estimated the determine to face at 0.1 per cent, however has revised this right down to 0.0. This is weaker than what was anticipated within the last quarter of the Conservatives’ tenure, information reveals.

The UK economic system recorded no development within the third quarter, revised down from an preliminary estimate of 0.1%, the Office for National Statistics mentioned.

According to information additionally printed within the ONS’s newest GDP quarterly nationwide accounts report, early estimates of disposable family revenue present no development in Q3 – the three months after Labour got here into energy. The figures comes after 1.4 per cent of development within the earlier quarter.

The outcome will come as a recent blow for Sir Keir Starmer’s Labour authorities. Raising residing requirements has been a cornerstone promise for the get together, with the prime minister earlier within the month promising to that authorities spending plans will guarantee “working people have more money in their pocket” and that “growth must be felt by everyone, everywhere.”

Real GDP per head additionally fell by 0.2 per cent in Q3 – the three months after Labour got here into energy. This is 0.2 per cent decrease than the identical time final 12 months.

For GDP when it comes to output, the ONS says there no development within the providers sector within the newest quarter, whilt a 0.7 per cent increase in development was offest by a 0.4 per cent fall in manufacturing.

The newest GDP quarterly nationwide accounts report, simply launched, additionally reveals that actual GDP per head fell by 0.2% in Quarter 3 2024, and is 0.2% decrease in contrast with the identical quarter a 12 months in the past.

ONS director of financial statistics Liz McKeown explains: “The economy was weaker in the 2nd and 3rd quarters of this year than our initial estimates suggested with bars and restaurants, legal firms and advertising, in particular, performing less well.

“The household saving ratio fell a little in the latest period, though remains relatively high by historic standards. Meanwhile real household disposable income per head showed no growth.”

Reacting to the figures, Labour chancellor Rachel Reeves mentioned in an announcement: “The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge.

“But this is only fuelling our fire to deliver for working people.

“The Budget and our plan for change will deliver sustainable long-term growth, putting more money in people’s pockets through increased investment and relentless reform.”

The new figures depart “plenty of scope for a lively debate with the family over the festive period about whether or not the economy is heading for a recession” says Paul Dales, chief economist at Capital Economics.

“Overall, these data suggest that after a bumper first half of the year, the economy ground to a halt in the second half of the year due to a combination of the lingering drag from higher interest rates, weaker overseas demand and some concerns over the policies in the Budget.

“Our hunch is that 2025 will be a better year for the economy than 2024. But more recent data suggest the economy doesn’t have much momentum as the year comes to a close.”

The poor financial figures come after a forecast from the Confederation of British Industry (CBI) says the non-public sector expects “steep decline in activity” into 2025. In the findings, launched the day earlier than the GDP announcement, the influential enterprise organisation mentioned expectations amongst enterprise leaders are at a two 12 months low.

Alpesh Paleja, CBI Interim Deputy Chief Economist, mentioned: “There is little festive cheer in our latest surveys, which suggest that the economy is headed for the worst of all worlds – firms expect to reduce both output and hiring, and price growth expectations are getting firmer.

“Businesses continue to cite the impact of measures announced in the Budget – particularly the rise in employer NICs – exacerbating an already tepid demand environment.”