The United Kingdom (TADAWUL:4280)'s economy recorded zero growth in the third quarter of 2024, according to revised figures from the Office for National Statistics (ONS).
Quick to blame
Critics of the new Labour Government have been quick to blame the party’s economic agenda, which was rapidly implemented after it took office on July 5 following 14 years of Conservative leadership, for the current doldrums.
Opposition voices, including Conservative economic spokesperson Mel Stride, have seized on the data, claiming that the growth “tanked on Labour’s watch" and that “warning lights are flashing on the economy”.
Some argue that Labour's rhetoric about inheriting "the worst economic situation in generations" has dented consumer and business confidence – though it’s fair to say that the UK economy hadn’t been firing on all cylinders for some time before Starmer’s ascent.
The government faces mounting pressure to reverse the stagnation and fulfil its promise of delivering robust growth, with further challenges expected as inflation and global economic uncertainties persist.
Economy scores a duck
The initial estimate of 0.1% growth from July to September was downgraded to a duck – to borrow terminology from the country’s famed export sport – with the ONS citing weaker performance in sectors such as hospitality.
And despite the government’s pledge to turn things around, the latest economic data underscores the hurdles it faces, with earlier data revealing a 0.1% contraction in October.
Chancellor of the Exchequer Rachel Reeves acknowledged the scale of the task, saying: “The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge.”
Reeves' first budget, unveiled in late October, raised taxes on businesses to address fiscal deficits and bolster public services.
While Labour defends the tax increases as necessary, business critics argue the measures are stifling growth.
And many businesses have reportedly responded by raising prices or cutting staff, which will only exacerbate the economic pressures.