UK economy sees slower than expected growth
Chancellor Was The Reeves Latest With She Figures 'not Rachel Exchequer Of Said Satisfied' The Uk Economic
The UK economy cooled by more than expected in the third quarter after a surprise contraction in September as anxiety built over the new Labour government’s fiscal plans.
Gross domestic product rose 0.1% compared to the previous three month period, below the 0.2% gain forecast by economists, data from the Office for National Statistics (ONS) showed on Friday. The economy shrank 0.1% in September alone, much worse than the 0.2% growth expected.
The UK economy had seen the quickest growth in the G-7 during the first half of the year, bouncing back rapidly from last year’s mild recession. However, growth slowed sharply from 0.5% in the second quarter.
It appears the economy may have been held back by growing concerns over Labour’s first budget with consumer and business confidence diving in September over worries of potential tax rises. Those fears came to pass as Labour announced £40bn (€47.95bn) of tax hikes on October 30, with the bulk being shouldered by businesses.
Services flatlined in September and manufacturing shrank 1%, the ONS said. Only the construction sector grew, expanding an anaemic 0.1%.
“These figures suggest that the economy went off the boil even before the budget, as weaker business and consumer confidence helped weaken output across the third quarter, particularly in September,” said Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales.
“Following a ‘gangbusters’ first half of the year, the third quarter outturn paints a more realistic picture of the UK’s underlying growth trajectory.”
Responding to the latest GDP figures, Chancellor Rachel Reeves said “improving economic growth is at the heart of everything I am seeking to achieve, which is why I am not satisfied with these numbers.”