Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK GDP figures:
“No growth is not exactly the kind of headline any government wants but with this last lot of GDP figures the UK economy has at least avoided falling into a technical recession this year.
“And despite strikes on the railways and by junior doctors, September did deliver a sliver of growth as this year’s Covid vaccine programme was rolled out and the unseasonably warm weather helped reinvigorate the ailing construction sector.
“But cost of living pressures are still strangling consumer facing services with retailers punished further by high temperatures, which meant no one was buying winter woollens, and though summer’s last hurrah did tempt us to get out and about, budget constraints have hampered any chance of a post-pandemic recovery.
“Rate hikes have made potential home buyers think twice and although the Bank of England has pressed the pause button, at least for now, the increased cost of borrowing is likely to keep activity in the housing market subdued.
“And subdued is the word du jour. All sectors are struggling – there are no stars in this set of figures, no big boosts to offset falls elsewhere.
“But think back to where we were this time last year as inflation was reaching its peak and there is cause for a degree of optimism.
“However, stagnant waters can begin to smell quite quickly and no growth suggests a degree of economic resilience, which does mean no stimulating rate cuts are likely in the near term.”
