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The UK financial system didn’t develop within the third quarter, in response to the newest official figures, in a contemporary blow to the Labour authorities.
GDP didn’t register any progress within the three months to September, the Workplace for Nationwide Statistics mentioned on Monday, down from its first estimate of a 0.1 per cent growth.
The financial system was held again because the dominant companies sector stagnated within the quarter. Manufacturing output fell 0.4 per cent, offsetting a 0.7 per cent improve within the development sector.
The figures are a setback to the federal government, which has put boosting the financial system’s progress on the coronary heart of its agenda. Surveys have pointed to the chilling impact of chancellor Rachel Reeves’ tax-raising Funds in October, which has hit enterprise confidence and curtailed hiring intentions.
Reeves on Monday admitted that the federal government confronted a “big” problem however insisted that the Funds had laid the foundations for long-term progress.
If progress undershoots forecasts made within the Funds, it raises the prospect that Reeves might have to ship spending cuts or larger taxes subsequent yr to make sure she continues to satisfy her borrowing guidelines.
“The problem we face to repair our financial system and correctly fund our public funds after 15 years of neglect is large,” Reeves mentioned. “However that is solely fuelling our hearth to ship for working individuals.”
Final week Andrew Griffith, shadow enterprise secretary, claimed the UK was heading for a “January of discontent” and the potential for a recession. He mentioned if there was a recession it might be “made in Downing Road”.
