1 week Ago By Evening Standard
The shrunk 0.1% in September, shock figures revealed on Friday in a blow to Chancellor . Gross Domestic Product (GDP) grew by a meagre 0.
1% - slightly below City expectations - between July and September, according to the Office for National Statistics. September’s negative growth was partly blamed on a fall in manufacturing, although growth was “subdued” across most sectors. Friday’s GDP figures were for the first three months of Labour being in power after the July 4 general election.
They were bad news for Ms Reeves who is already under fire over her Budget including the National Insurance hike on employers, including for hospices, charities and GPs. Responding to the figures, the Chancellor 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. “At my Budget, I took the difficult choices to fix the foundations and stabilise our public finances.
“Now we are going to deliver growth through investment and reform to create more jobs and more money in people’s pockets, get the NHS back on its feet, rebuild Britain and secure our borders in a decade of national renewal." But shadow chancellor Mel Stride told Times Radio: “Across the summer, what the Labour government did in order to justify what they planned to do all along, which was to substantially hike taxes without telling anybody in advance, it was their mission to talk down the UK economy.” Liberal Democrat Treasury Spokesperson Daisy Cooper MP said: “After a Budget promising to deliver little by way of growth and an unfair tax on small businesses, we need to see a real growth plan from the Government.
” The UK economy growth of 0.1% over the third quarter of 2024 comes after 0.5% growth between April and June, the Office for National Statistics (ONS) said.
The latest quarterly estimate was behind economist predictions of 0.2%. Liz McKeown, ONS director of economic statistics, said: "The economy grew a little in the latest quarter overall as the recent slowdown in growth continued.
"Retail and new construction work both performed well, partially offset by falls in telecommunications and wholesale. Generally, growth was subdued across most industries in the latest quarter. "In September the economy shrank a little.
Services showed no growth with a notable increase in car sales offset by a slow month for IT companies. "Production fell overall, driven by manufacturing, though there was an increase in oil and gas extraction." However, some economists remained doubtful whether the Bank of England’s Monetary Policy Committee will cut interest rates further in December from 4.
75 per cent. Suren Thiru, economics director at accounting institute the ICAEW Economics, said: “In spite of these downbeat figures, a December policy loosening looks improbable as rate setters will likely be concerned enough over inflation risks from the Budget and growing global headwinds to resist signing off back-to-back interest rate cuts.” On Thursday night, Ms Reeves She told business leaders she plans to rip up financial red tape and create pension “megafunds” that will “power growth” in the economy and reward British savers.
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