Britain’s economy showed signs of stagnation in the third quarter of 2024, with official figures revealing zero growth between July and September, forcing Labour leadership to temper expectations about the pace of economic revival.
Sir Keir Starmer’s cautionary message about economic prosperity not happening “overnight” comes as Downing Street remains non-committal about potential future tax increases. The Office for National Statistics’ revised figures paint a concerning picture, downgrading initial estimates of 0.1 per cent growth to a complete standstill.
The economic data reveals a troubling pattern with GDP declining by 0.1 per cent in both July and September, offset only by a modest 0.2 per cent expansion in August. The situation appears more severe when considering the ONS’s downward revision of second-quarter growth from 0.5 per cent to 0.4 per cent.
Rachel Reeves, the Chancellor, acknowledged the magnitude of the challenge, emphasising her October budget’s focus on delivering sustainable long-term growth. The budget included £40 billion in tax increases, with £25 billion coming from elevated employers’ national insurance contributions, measures which have been criticised for dampening business confidence and hiring activities.
The Confederation of British Industry’s latest report indicates business growth expectations have fallen to their lowest level since November 2022. The Bank of England’s recent forecast revision, suggesting economic stagnation in the final quarter, adds to mounting concerns about potential recession risks.
While household savings ratios remain above pre-pandemic levels and annual household disposable income rose by 4.5 per cent in the third quarter, the overall economic outlook remains uncertain. The performance downturn in legal and advertising sectors, coupled with subdued activity in hospitality, has contributed significantly to the economic slowdown.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.