The revised figures from the Office for National Statistics (ONS) show that the UK economy did not grow in the last quarter. The previous estimate for July and September indicated a growth of 0.1%.
Early estimates suggest that real GDP per head dropped by 0.2% in the third quarter of 2024, and is 0.2% lower compared to the same quarter a year ago. Both the UK and Italy had no growth in the G7 during the third quarter.
The slight growth reported last month was already below expectations and lower than the 0.4% growth seen between April and June.
Bars and restaurants, legal firms, and advertising sectors performed poorly according to Liz McKeown, the director of economic statistics. Despite a slight fall in the household saving ratio, it remains relatively high historically. Real household disposable income per head showed no growth.
The ONS has also revised down its growth reading for the second quarter of 2024 to 0.4%, lower than the previously estimated 0.5% in September.
More bad news – and could it get worse?
The country and Labour face more bad economic news. The government, which aimed for the fastest growth in the G7, now ranks at the bottom of the table in its first quarter. The Bank of England revised its forecast to no growth from October to December.
If this trend continues, the country could experience six months of no growth.
Chancellor Rachel Reeves, whose budget received criticism from business leaders, stated that the challenge to “fix our economy” is substantial. She emphasized the need for sustainable long-term growth and increased investment.
Labour’s Chief Secretary to the Treasury Darren Jones mentioned working with investors, wealth creators, and workers to stimulate economic growth in their plan.
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Shadow culture secretary Stuart Andrew described the latest figures as “really disappointing,” expressing concerns about the economy’s future. He attributed some impact to the increases in national insurance, even though the data predates the budget announcement.
“People’s confidence in the economy has declined, and they need to reconsider the decisions made in the budget,” Andrew said.