UK economy flatlines under Labour: GDP disappoints with just 0.1% growth in November and was at a standstill over past three months – as businesses warn over Budget impact_Nhy
Rachel Reeves has been warned the UK economy is effectively at a standstill after ‘disappointing’ GDP figures today.
The UK economy expanded by just 0.1 per cent in November – less than expected, and not enough to offset the previous two months of contraction.
The Chancellor insisted growth is her ‘number one mission’ and she will ‘fight’ for it ‘every day’.
But businesses have been warning that the massive Budget tax raid and more employment red are crushing activity and threatening jobs.
The latest estimates from the Office for National Statistics (ONS) found GDP rose 0.1 per cent after falling by 0.1 per cent in both September and October.
Most analysts had predicted a rebound of 0.2 per cent.
The UK economy expanded by just 0.1 per cent in November – less than expected, and not enough to offset the previous two months of contraction
Chancellor Rachel Reeves insisted growth is her ‘number one mission’ and she will ‘fight’ for it ‘every day’
It heaps pressure on Ms Reeves after weeks of financial markets battering the UK over ‘Staglflation’ worries.
The atmosphere calmed yesterday after a surprise fall in inflation, offering some welcome respite for the government.
ONS Director of Economic Statistics Liz McKeown said: ‘The economy continues to be broadly flat, having grown slightly in November following two small falls in the previous months.
‘Services grew a little, with wholesaling, pubs & restaurants and IT companies all doing well, partially offset by falls in accountancy and business rental & leasing.
‘Construction also grew, led by new commercial developments, while Production continued to decline in November with further falls across a range of manufacturing industries and oil & gas extraction companies.’
Ms Reeves said: ‘After 14 years of economic stagnation, this Government’s number one mission is to grow our economy.
‘I will fight every day to deliver that growth and put more money into working people’s pockets.’
Suren Thiru, Economics Director at ICAEW, said: ‘This disappointingly modest return to growth for the UK economy is unlikely to ease stagflation concerns, with a recovery in service sector output helping drive only a slight strengthening in overall activity.
The economy has not returned to trend growth rate after Covid
‘November’s uptick is unlikely to have sparked a more notable improvement in economic activity across the fourth quarter with the dramatic damage to confidence from the budget and global uncertainty expected to have suppressed activity in December.
‘Beyond the political noise, a key lesson from this financial market turbulence is the need to address our longstanding challenges of poor productivity and persistent supply side constraints, to help better insulate us against these external shocks.
‘Though these disappointing figures make a February interest rate cut more probable, concerns over financial market fragility and heightened global inflation risks mean a policy loosening next month is not quite done and dusted.’
