UK economy fails to grow, registers 0% quarterly growth

The British economy failed to grow in the July-September quarter and registered 0 per cent growth.

The British Office for National Statistics (ONS) on Monday (December 23) revised the earlier quarterly growth estimate of 0.1 per cent and said that the economy did not register any growth in the third quarter (July-September).

Liz McKeown, the Director of Economic Statistics at ONS, said the economy performed worse-than-expected in both second and third quarters.

“The economy was weaker in the second and third quarters of this year than our initial estimates suggested, with bars and restaurants, legal firms and advertising, in particular, performing less well,” said McKeown.

The flattening of the economy marks a new challenge of British Prime Minister Sir Keir Starmer, who had come to power with the promise of taking the country out of what he called 14 years of misgovernance by the Conservative Party.

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In an indictment of Starmer’s government, Paul Dales, the Chief UK Economist at Capital Economics, said policies in the annual budget of the new government contributed to the 0 per cent growth. He further said that data suggests the “economy doesn’t have much momentum as the year comes to a close”.

“Overall, these data suggest that after a bumper first half of the year, the economy ground to a halt in the second half of the year due to a combination of the lingering drag from higher interest rates, weaker overseas demand and some concerns over the policies in the budget. Our hunch is that 2025 will be a better year for the economy than 2024. But more recent data suggest the economy doesn’t have much momentum as the year comes to a close,” said Dales, as per CNBC.

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For the average British person, the economic outlook remains bleak despite the Starmer government’s rhetoric. The ONS said that the real households’ disposable income per head registered 0 per cent growth in the July-September quarter compared to 1.4 per cent in the previous quarter. Inflation has also been on the rise. The ONS last week reported that inflation rose to 2.6 per cent in November from 2.3 per cent the previous month.