The UK economy saw minimal growth between July and September, expanding by just 0.1% and shrinking in September, according to the Office for National Statistics (ONS). Growth during the quarter was subdued across most industries, with the services sector – covering shops, bars and restaurants – stagnating in September and achieving just 0.1% growth overall.
The latest figures represent a sharp slowdown from the 0.5% growth recorded in the previous quarter and fall short of expectations. Economists suggest uncertainty surrounding October’s Budget contributed to cautious spending by households and businesses.
Labour prioritised economic growth when it took power, but Chancellor Rachel Reeves expressed dissatisfaction with the performance. Businesses, meanwhile, have criticised Budget tax increases, warning they could drive up prices and limit job creation. Major firms like Marks & Spencer and JD Sports have mentioned price hikes.
Reeves unveiled a “Budget for growth” in October, alongside plans to overhaul the pensions industry to encourage investment in UK companies and infrastructure. However, the Office for Budget Responsibility (OBR) believes the Budget will only deliver temporary benefits, predicting the economy’s size will remain unchanged in five years compared to prior forecasts.
The government has also urged UK regulators to prioritise economic growth. Still, critics argue that a lack of long-term strategies and reliance on short-term measures may hinder sustained recovery.
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