- UK GDP grew by just 0.1% in the three months to September – or not at all when you factor in population growth
- Growth petered out in September, with GDP for the month in negative territory as the impact of the Jaguar Land Rover shutdown compounded other factors
- Service and construction sector growth slowed significantly over the summer
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK GDP figures:
“This latest set of growth figures adds to the immense weight on Rachel Reeves’ shoulders ahead of her second Budget.
“Confidence is crucial, and even sectors that delivered a tiny bit of growth over the summer such as construction and services have seen demand dwindling as many businesses and households decided to press pause on their spending decisions.
“Growth was held up by this government as a panacea – the way to build back public services and pay out more in benefits and wages without the need to increase taxes. But the sums never seemed to add up and the chancellor is now faced with the prospect of breaking manifesto commitments and then trying to foster the confidence needed to deliver growth whilst taking billions out of people’s pockets through tax hikes.
“The contraction in September can partly be explained by that debilitating cyber-attack on Jaguar Land Rover, but when you strip out population growth the economy simply stalled over the summer. It’s a long way from the economy bounce the country enjoyed at the start of the year when many companies were front loading production in order to beat Donald Trump’s tariffs.
“Households and businesses are nervous and the late date for this year’s Budget has allowed time for the Treasury to roll its pitch, but it’s created uncertainty at the exact moment retailers and hospitality venues need people to indulge in festive cheer.
“Starmer and Reeves need to dust themselves off and be ready to sell what are expected to be uncomfortable decisions to the country if they want to prevent more months of negative growth.”
