The UK economy expanded by 0.1% between July and September 2024, according to the Office for National Statistics (ONS), marking a slowdown from 0.5% growth in the previous quarter.
September saw a 0.1% contraction, contributing to this weaker performance. Economists had forecasted 0.2% growth for Q3, but sluggish performance in the services sector, which constitutes the majority of the economy, offset an 0.8% expansion in construction.
Chancellor Rachel Reeves acknowledged the disappointing figures, emphasizing her focus on long-term growth through investment and structural reforms. She cited her recent budget’s measures aimed at stabilising public finances while fostering job creation, improving healthcare, and enhancing border security as part of a broader national renewal agenda.
Comparatively, the UK’s growth fell short of the US's 0.7% and the Eurozone’s 0.4%, pushing the country towards the bottom of the G7 rankings for the quarter.
Economists noted that inflationary pressures, fuelled in part by recent fiscal measures, might slow the Bank of England’s plans to lower interest rates. The Bank recently cut its base rate to 4.75%, predicting inflation will return to its 2% target by 2027.
Despite this, the ONS data suggests some optimism, with expected boosts to GDP in 2025 attributed to the Chancellor's £70 billion package of tax and borrowing initiatives. However, the outlook underscores the need for strategic growth policies to counter ongoing economic challenges.
Source:
sky news
