The UK’s economy experienced a modest growth of 0.1% during the July-to-September period, falling short of analysts’ expectations of 0.2%. This increase represents a modest trend toward slowing down from last quarter’s 0.3%. It’s an even bigger decline than the 0.7% growth we experienced in the first quarter of this year. It is notable in this instance, as the economy contracted by 0.1% in the month of September, mainly due to a large decline in car production.
The ONS confirmed the recent slowdown in car production in September. This drop was impacted by a major cyber attack that hit production of Jaguar Land Rover (JLR). This recent disruption has raised concern over the vulnerability of UK manufacturing industries. Challenges this important sector has been trying in recent months to work its way out of.
Analysts are already looking to these figures as signs of potentially severe economic problems to come. Ruth Gregory, deputy chief UK economist at Capital Economics, said it was a stark picture of the economy today. She underlined the need for the economy to start generating some real muscle. Her remarks capture a broadening alarm that the UK’s recovery is starting to falter.
Suren Thiru, the economics director for the Institute of Chartered Accountants in England and Wales, welcomed improvements on the recent figures. What’s more, he hopes they will cause policymakers to reconsider their monetary policy choices. He indicated that these developments may be enough “to push a majority of rate-setters to authorise another policy loosening.”
The ONS called attention to how deeply services drove overall growth in the most recent quarter. This sector’s contribution should have been a leading indicator for economic performance. Commercial rentals and leasing, as well as live entertainment and retail were bright spots. This robust performance went a long way to offset dramatic losses in research and development and personal care services.
Mel Stride, chancellor of the exchequer in the current shadow cabinet, went after the current government’s mismanagement of the economy. He recently argued that the prime minister and chancellor are “in office but not in power.” That is an alarming degree of separation between their leadership and sound economic stewardship. Stride claimed that Sir Keir Starmer had effectively “stripped the chancellor of responsibility for the Budget,” emphasizing a lack of confidence in government fiscal policies.
As the conversation around economic policy development rages on, Labour’s Rachel Reeves underscored her pledge to focus on the challenges facing working people. She stated, “there’s more to do to build an economy that works for working people,” indicating an intention to implement measures aimed at fostering economic stability and growth.
Reeves announced plans for her upcoming Budget presentation, asserting, “At my Budget later this month, I will take the fair decisions to build a strong economy that helps us to continue to cut waiting lists, cut the national debt and cut the cost of living.” Her comments illustrate an effort to balance fiscal responsibility with new social priorities.