GDP rose by just 0.1% in the July-September quarter, data just released by the Office for National Statistics shows.
That’s down from the 0.5% growth in the second quarter of the year, and weaker than the 0.2% expected.
The scorecard for the Labour govenment’s first quarter in office shows that the services sector grew by 0.1%, while construction grew 0.8% … but production fell by 0.2% in the quarter.
Disappointingly, the economy actually contracted in the last quarter once you adjust for population changes.
Real GDP per head is estimated to have fallen by 0.1% in the third quarter of 2024, and is flat, compared with the same quarter a year ago, the ONS says.
The UK economy ended the summer on a weak note, with GDP contracting in September. Today’s GDP report shows that monthly real GDP is estimated to have fallen by 0.1% in September.
This was largely due to declines in manufacturing output and information and communication services, the ONS says.
While the services sector stagnated in September, production output fell by 0.5% in the month, but construction output grew by 0.1%.
The ONS director of economic statistics, Liz McKeown, says: “The economy grew a little in the latest quarter overall as the recent slowdown in growth continued. Retail and new construction work both performed well, partially offset by falls in telecommunications and wholesale. Generally, growth was subdued across most industries in the latest quarter.
“In September the economy shrank a little. Services showed no growth with a notable increase in car sales offset by a slow month for IT companies. Production fell overall, driven by manufacturing, though there was an increase in oil and gas extraction.”
The CBI is blaming the uncertainty around last month’s budget for the slowdown in growth over the summer.
Ben Jones, the CBI lead economist, says: “The UK economy stalled over the third quarter. Uncertainty ahead of the budget probably played a big part, with firms widely reporting a slowdown in decision making. Hopefully this will prove to be a blip. We still expect the economy to return to a path of modest growth in the year ahead. But downside risks to the outlook have increased.
"The budget has set off warning lights for business. The hike in national insurance contributions alongside other increases to employers’ cost base will add to the burden on business. And it is expected to trigger a more cautious approach to pay, hiring and investment as companies work through what it means for their own budgets."
The agenda • 7am GMT: First estimate of UK GDP for Q3 2024 • 7am GMT: First estimate of UK GDP for September 2024 • 7am GMT: UK trade balance for Q3 2024 • 8.30am GMT: Hong Kong’s GDP report for Q3 2024 • 9.30am GMT: UK productivity data for Q3 2024 • 1.30pm GMT: US retail sales for October
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