Reeves 'not satisfied' as economic growth slows in third quarter

The Office for National Statistics (ONS ) reported that the UK economy expanded by 0. 2 % During the period from July, to September compared to a growth rate of 0. 6 % In the preceding quarter.

The projection fell short of what economists had forecasted at 0·3%. It pertains to the time frame leading up to the Budget announcement in October when Labour proposed an increase, in both spending and corporate taxes.

It's a setback for the Labour party since they've been emphasizing growth as a crucial aspect of their appeal, to the public—an approach that played a major role in their landslide victory in July.

Ms. Reeves mentioned that enhancing progress is central to all her goals and objectives. She expressed dissatisfaction, with the statistics.

Ms. Reeves told the press on Friday that she hopes for robust and immediate growth that benefits families nationwide.

According to Liz McKeown from the Office for National Statistics (ONS) certain sectors such, as retail and construction showed performance. However she remarked that overall growth was limited across a majority of industries in the recent quarter.

In September it is believed that the economy shrank by 0. 01%, According to a number of specialists who suggested that the decrease might be linked to businesses delaying their spending choices until, after the Budget announcement.

Leading up to the event or situation in question Miss Reeves consistently emphasized that the financial plan would involve decisions." The declaration was made following the timeframe indicated by these data.It was during this period that the Labour Party revealed a plan to increase employer taxes in order to support an increase, in government expenditures.

Ben Jones who is the economist at the Confederation of British Industry (also known as CBI) mentioned that the hesitation leading up to the Budget may have significantly contributed to the situation as companies noted a decrease in their decision making speed, for expenditures.

In September the largest sector of the economy—services—experienced no growth. Only saw a slight increase of 0.l %, over the three month span.

Factory production decreased by 0. while the construction industry saw a growth of 0."in the three months particularly with a noticeable drop, in September."

Shadow chancellor Mel Stride criticized the Government for undermining the economy post election. Mentioned that they are now facing the consequences of their actions. He also highlighted that the recent Budget introduced by the Government includes tax increases that could impede growth.

Labours plans to increase spending by around £70 billion annually are expected to stimulate economic growth in the next couple of years compared to earlier predictions from the Office, for Budget Responsibility.

Chief UK economist at Deutsche Bank Sanjay Raja mentioned that there are still challenges, on the journey.

He cautioned that the increase, in taxes might negatively affect business expenditure more before the beneficial effects of Labours spending proposals kick in early next year.

"He mentioned that we anticipate an increase in growth, towards the end of the year and we expect to maintain a positive momentum heading into 2025."

However there are concerns emerging as geopolitical tensions increase and the possibility of a trade war looms large in the horizon.

The GDP numbers align with the choice of Bank of England officials to lower interest rates by 0..25 percentage points to 4..75 percent at the beginning of November and anticipate another decision, on rates in December.

Suren Thiru from the Institute of Chartered Accountants, in England and Wales mentioned that even though the figures are not positive overall. Another rate cut month is unlikely according to him.

He mentioned that policymakers are probably worried, about inflation concerns stemming from the budget and increasing challenges, which may lead them to refrain from approving consecutive interest rate reductions.

The Bank also predicts that the additional government expenditure will increase growth by 0. 75 Percentage p oints at its point, in a year compared to the previous projections released in August.