The UK monetary system expanded by merely 0.1% throughout the third quarter of 2024, falling in want of the 0.2% growth forecast by economists and marking a slowdown from the 0.5% improve recorded throughout the second quarter.
The latest GDP figures, launched by the Office for National Statistics (ONS), revealed weakening momentum throughout the UK’s dominant firms sector.
In its first estimate of train for the three months to September, the ONS reported that output from every the businesses and manufacturing sectors had eased. The slowdown has been attributed to lingering uncertainty surrounding the model new Labour authorities’s worth vary and persistently extreme borrowing costs.
The firms sector, which contributes roughly 80% of UK GDP, grew by merely 0.1% by way of the quarter whereas growth grew 0.8% and manufacturing fell by 0.2%.
ONS director of monetary statistics Liz McKeown acknowledged: “The economic system grew a little bit within the newest quarter total because the latest slowdown in development continued. Retail and new building work each carried out properly, partially offset by falls in telecommunications and wholesale. Generally, development was subdued throughout most industries within the newest 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.”
Labour, which acquired right here to vitality earlier this yr, has positioned monetary growth as a key protection priority. However, the lacklustre information highlights the difficulties of reaching this ambition throughout the face of fiscal constraints and subdued private-sector train.
Last month’s worth vary observed the chancellor rising taxes and borrowing in a switch Labour defended as important to stabilise public funds and improve firms. The measures included a hike in employers’ nationwide insurance coverage protection contributions, which many firms argue could dampen job creation and discourage funding.
Meanwhile, the Bank of England has lowered charges of curiosity twice this yr, with the latest decrease bringing expenses proper all the way down to 4.75%. However, borrowing costs keep elevated compared with pre-pandemic ranges, sustaining stress on UK households and firms.
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