Britain’s economy straightened in the third quarter, revised figures show

Britain’s economy failed to post any growth in the three months to September. revised figures The UK’s Office for National Statistics showed on Monday.

A initial assessment For the third quarter published by the ONS last month, it said UK GDP grew by 0.1% in the period. However, final data released on Monday showed GDP growth of 0% from the previous quarter.

The British pound It was slightly lower against the US dollar on Monday, trading around $1.2566 at 8:37 a.m. London time.

Monday’s figures dealt Britain another economic blow as a series of weak data prints dampened sentiment and raised questions about the newly elected Labor government’s fiscal strategy.

Earlier this monthData from the ONS showed that the UK economy unexpectedly contracted by 0.1% in October. This was the second consecutive monthly GDP decline for the country, following a 0.1% decline. in September.

Looking ahead, Paul Dales, chief UK economist at Capital Economics, said he expected Britain’s economy to continue to stagnate in the final quarter of 2024 – but his view was not entirely pessimistic.

“Overall, these data suggest that after a bumper first half, the economy will stall in the second half of the year due to a combination of high interest rates, weak external demand and some concerns.” policies in the budget,” he said.

“Our estimate is that 2025 will be a better year for the economy than 2024. But more recent data shows that the economy is not gaining much momentum as we approach the end of the year.”

Meanwhile, inflation will rise again. ONS reported on this last week Inflation in the UK rose to 2.6% in November, the second straight month of rising prices.

The Bank of England then kept its key interest rate on hold fixed 4.75%. Markets expected no rate change at Thursday’s Monetary Policy Committee (MPC) meeting – a surprise when three MPC members voted to cut rates (a Reuters poll had predicted only one member would vote to cut).

While Governor Andrew Bailey signaled before four rate cuts next year could be possible, traders are divided on when the Bank of England will start cutting interest rates. LSEG data shows markets are expecting another wait at the MPC meeting in February, with a small majority of traders expecting a 25 basis point rate cut in March.

This comes after Rachel Reeves, UK Chancellor of the Exchequer in late October released the first budget of a Labor government after replacing the long-standing Conservative government in July.

The budget included plans by Prime Minister Keir Starmer’s government to raise taxes by 40 billion pounds ($50.5 billion). Reeves said at the time that this would include a range of new policies, including an increase in employers’ National Insurance payments – earnings tax, as well as capital gains tax and abolition of winter fuel charges to pensioners.

Some policies have been widely criticized. For example, national insurance was caused by an increase in the payroll tax warnings from businesses that will be less likely to hire new employees report from recruitment site Indeed suggested earlier this month that the policy was already hitting jobs in Britain.