The UK economy expanded by just 0.1% in the 3 months from July to September – below most analysts’ expectations of 0.2%. This disappointing increase represents a cooling from last quarter’s 0.3%. It’s a notable drop from the 0.7% increase logged over the first three months of the year. Yet the figures shed light on continuing struggles. In September, we experienced a contraction of 0.1%, worsened by a major decrease in auto manufacturing.
September was a very painful month for the auto industry. Jaguar Land Rover (JLR) last month suffered a loss of 30,000 vehicles due to a cyber attack that crippled their global supply chain. This event clearly shaped the overall GDP growth, significantly highlighting the fragility still remaining in the manufacturing sector.
“A big take-home point. He added that these numbers should encourage policymakers to consider further easing steps. He noted, “to push a majority of rate-setters to authorise another policy loosening.”
Ruth Gregory, the deputy chief UK economist at Capital Economics, emphasized that the economy “is struggling to gain decent momentum.” This sentiment further emphasizes the worries about how sustainable this growth is, especially when placed next to the recent contraction.
Even with the national slowdown, services were a shining star in propping up growth in those most recent three months. Deep dives by industry The business rental and leasing, live events, and retail sectors led the recovery. This increase more than made up for decreases in research and development and hair and beauty salons. Advocate Liz McKeown helped add context to this alarming trend. She emphasized how services were key in helping to stimulate more economic activity during this time.
Together, these dynamics have significantly changed the political response to this new economic landscape. This sentiment was echoed by Mel Stride, Shadow Chancellor, who warned the government against a further unwind of the policy on growth. He criticized the fact that the Prime Minister and Chancellor have been “in office but not in power.” This reveals a shocking gap between their self-proclaimed leadership credentials and true governance. Furthermore, he indicated that Sir Keir Starmer had effectively “stripped the Chancellor of responsibility for the Budget.”