Newly revised official figures reveal that the UK economy experienced zero growth between July and September, suggesting an economic stall. The initial data had indicated growth of 0.1% during this period, but this has now been adjusted. Chancellor Rachel Reeves noted that the job of fixing the economy was “huge” and pledged that October’s Budget would promote sustainable, long-term growth and improve public finances. Reeves’ statement came after one of the UK’s foremost business groups, the CBI, suggested that their most recent survey of companies reflected a worrying downturn.
The CBI, which represents some 170,000 firms, revealed that companies expect to reduce output and hiring, as well as raise their prices in response to the tax hikes introduced in the Budget. Gross domestic product is used to measure the UK economy and is based on the extent of all economic activity amongst individuals, companies and governments within the nation. The ONS relies on these metrics when compiling growth estimates.
Revised data released on Monday revised growth figures from April to June, from 0.5% to 0.4%. The downgrade was put down to bars and restaurants, legal and advertising firms performing below expectations, whilst household disposable income per head also showed no growth at all. Liz McKeown, the director of economic statistics at the ONS, emphasised the significance of this finding.
This decline puts pressure on the Labour party, which has prioritised fiscal growth as its main objective. It has promised to increase economic growth, aiming to achieve the highest sustained rate in comparison to the other six members of the G7 group. Last week’s statistics, released separately, indicate that inflation rose in the country faster than it has done since March. The Bank of England has elected to maintain interest rates in response to this, citing the UK’s worse-than-expected performance. It downgraded its growth forecast for the final quarter of 2024 from 0.3% to zero growth.
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