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The UK economy stagnated in the three months to September, according to official figures that highlight the challenge facing chancellor Jeremy Hunt as he seeks to revive growth in his upcoming Autumn Statement.
Gross domestic product was unchanged in the third quarter compared with the previous three months, data published by the Office for National Statistics showed on Friday. This was down from a 0.2 per cent expansion in the previous three months, suggesting that high borrowing costs are taking a toll on activity and the cost of living crunch is still hitting household spending.
The figure was marginally better than the 0.1 per cent contraction forecast by economists polled by Reuters, but was in line with the Bank of England’s expectations. The Bank forecasts that the economy will be flat in 2024.
Darren Morgan, the ONS’s director of economic statistics, said: “The economy is estimated to have shown no growth in the third quarter. Services dropped a little, with falls in health, management consultancy and commercial property rentals. These were partially offset by growth in engineering, car sales and machinery leasing.
“There were also small growths in manufacturing, led by cars and metal products, while construction grew due to new commercial property work.”
Output rose 0.2 per cent month on month in September, the ONS data showed, stronger than analysts’ expectations of no change.
The data comes ahead of the Autumn Statement on November 22 in which Hunt will outline plans to boost economic growth.
Hunt said on Friday: “The Autumn Statement will focus on how we get the economy growing healthily again by unlocking investment, getting people back into work and reforming our public services so we can deliver the growth our country needs.”
