Keir Starmer admits economic growth figures are ‘not good enough’ as GDP increases just 0.1% in Labour’s first three months – as PM seeks to dodge blame for rising mortgage rates_Nhy
Anaemic economic growth figures are ‘not good enough’, Sir Keir Starmer admitted yesterday – as he sought to dodge blame for rising mortgage rates.
Official figures last week revealed that growth stalled in Labour’s first three months in office following doom-laden warnings about the Budget from the Prime Minister and Chancellor Rachel Reeves.
Sir Keir has declared that economic growth is his ‘number one’ mission and has vowed to make the UK economy the fastest growing in the G7 group of advanced nations.
But data from the Office for National Statistics revealed the economy grew by just 0.1 per cent in the three months to the end of September, a fall from 0.5 per cent in the last quarter overseen by the Conservatives.
The figure was the second slowest in the G7, ahead of only Italy. The grim outlook was accompanied by signs mortgage lenders are raising rates on fixed-term deals amid fears the Chancellor’s £70 billion-a-year splurge will damage the fight against inflation and lead the Bank of England to cut interest rates more slowly.
Speaking to reporters in Brazil for the G7 summit, Sir Keir acknowledged Labour had so far failed to boost economic growth.
The PM said: ‘We had the growth figures (last week). Look, they’re not good enough, they’re not satisfactory – I want to go further than that. That’s why we’re working so hard to get the investment we need into the country. But the first step is to stabilise the economy. Do I want better growth than we saw in the figures (last week)? Yes, I do.’
Nationwide, HSBC, Santander, TSB and Virgin Money are among a string of banks which have raised the cost of fixed-rate mortgage deals in the wake of the Budget, despite a recent interest rate cut by the Bank of England.
Sir Keir Starmer at the G20 summit in Rio de Janeiro. The PM has said growth figures are ‘not good enough’ as official figures showed GDP rose just 0.1% since Labour took office
It follows doom-laden warnings about the Budget unveiled by the Prime Minister and Chancellor Rachel Reeves
But the PM insisted that rises in mortgage rates were not down to his government’s policies (file image)
Following Liz Truss’s notorious mini-Budget in 2022, Labour was ruthless in trying to pin the blame for mortgage rate rises on the Conservatives, despite the fact they were rising globally.
But Sir Keir insisted his government’s policies couldn’t be blamed for recent hikes in mortgage costs.
‘What we have done with the Budget is to stabilise the economy and that, in my view, was the essential first step,’ he said.
‘As a result of that, the forecasts are for interest rates to go down, inflation to go down – you saw the figures around the Budget.’
When reporters pointed out mortgage rates were rising, he replied: ‘Yeah, but they’re individual decisions for the banks, but the interest rates will be coming down.’
The UK performance in the three months to September was worse than analysts had expected – with the final month seeing a 0.1 per cent fall in GDP
A fall in production sparked the dip in GDP seen in September
Meanwhile, Sir Keir hinted he will prioritise improved trade with the EU over a free trade deal with the US, saying he had already invested ‘a lot of time’ in trying to lay groundwork for a Brexit reset.
‘We have always wanted trade arrangements both with the EU and with the US and as you know I want to ensure we get a better deal with the EU. I’ve spent a lot of time investing in those relationships,’ he said.
‘Of course I want the best possible trading relationship with the US as well and that’s the approach I’ll take.’
Shadow Chancellor Mel Stride last night called Labour’s bid to dodge the blame for rising mortgage rates ‘desperate spin’, adding: ‘At the end of the day his government’s choices will lead to interest rates staying higher for longer, punishing thousands of hard-working families with mortgages for years to come.’
