UK economy flatlines, putting pressure on Rachel Reeves
GuardianDEC 23 2024
UK Economic Growth Revised to Zero for Q3 2024
Above: UK Prime Minister Keir Starmer Image copyright: Tolga Akmen/Contributor/EPA/Bloomberg via Getty Images
The Facts
The UK's Office for National Statistics (ONS) has downgraded the nation's Q3 2024 gross domestic product (GDP) growth to zero from an initial estimate of 0.1%, while second-quarter growth was also revised from 0.5% to 0.4%.
GDP per head fell by 0.2% and was 0.2% lower compared to the same period a year earlier. The downward revisions were in part attributed to weaker performance in bars and restaurants, legal firms, and advertising sectors.
Although the household saving ratio fell from 10.3% to 10.1% from Q2 to Q3, it remains higher than the pre-pandemic average. Meanwhile, disposable income increased 4.5% on an annual basis, though real households’ disposable income per head was stagnant in Q3.
The Spin
Left narrative
Labour inherited an economy weakened by years of Conservative mismanagement. While recent growth has stalled, the government's focus on long-term reforms, such as boosting business investment and addressing inequality, aims to stabilize the economy. Turning around years of neglect takes time.
Right narrative
Labour's economic performance has been underwhelming. Its budget, which increased taxes and employer national insurance, has worsened the outlook, pushing businesses to cut jobs and raise prices. With plummeting business confidence and recession fears, Labour's economic plan is failing.
Metaculus Prediction
Public Figures
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