UK economy grew just 0.1% between July and September as factory output fell

'Improving economical maturation is astatine the bosom of everything I americium seeking to achieve, which is wherefore I americium not satisfied with these numbers'

UK economical maturation has decelerated betwixt July and September, compared to the 4th before, according to authoritative statistics, delivering a setback to Chancellor Rachel Reeves.

The system expanded by 0.1% implicit this period, down from the 0.5% maturation seen betwixt April and June, reported the Office for National Statistics (ONS). This fig fell abbreviated of the 0.2% maturation forecasted by economists and comes arsenic Labour introduced a boost successful Government spending and concern taxes successful past month's Autumn Budget.

September saw a dip successful the economy, estimated astatine a contraction of 0.1%, with preceding months having displayed growth. The slowdown was attributed chiefly to downturns successful mill output and IT services.

Reeves said: "Improving economical maturation is astatine the bosom of everything I americium seeking to achieve, which is wherefore I americium not satisfied with these numbers. At my Budget, I took the hard choices to hole the foundations and stabilise our nationalist finances."

She added: "Now we are going to present maturation done concern and betterment to make much jobs and much wealth successful people’s pockets, get the NHS backmost connected its feet, rebuild Britain and unafraid our borders successful a decennary of nationalist renewal."

The work sector, forming the bulk of the economy, stalled successful September, lone increasing by 0.1% implicit the quarter.

On the manufacturing front, output declined by 0.2% done the 3 months, led by a sharper autumn successful September. Contrastingly, the operation assemblage experienced growth, rising by 0.8% passim the quarter.

Liz McKeown, ONS manager of economical statistics, remarked: "The system grew a small successful the latest 4th wide arsenic the caller slowdown successful maturation continued." Commenting connected assorted sectors, she added: "Retail and caller operation enactment some performed well, partially offset by falls successful telecommunications and wholesale. Generally, maturation was subdued crossed astir industries successful the latest quarter.

"In September the system shrank a little. Services showed nary maturation with a notable summation successful car income offset by a dilatory period for IT companies. " On the accumulation front, she said: "Production fell overall, driven by manufacturing, though determination was an summation successful lipid and state extraction."

Ben Jones, pb economist astatine the Confederation of British Industry, suggested that the anticipation surrounding the autumn Budget had an impact, saying uncertainty "probably played a large part", aft businesses indicated a deceleration successful concern decisions. He remained optimistic, however: "Hopefully this volition beryllium to beryllium a blip. We inactive expect the system to instrumentality to a way of humble maturation successful the twelvemonth ahead. But downside risks to the outlook person increased."

Suren Thiru, economics manager astatine the Institute of Chartered Accountants successful England and Wales, said thatthe system "went disconnected the boil adjacent earlier the Budget", pointing to a diminution successful concern and user confidence. He reflected connected caller performance: "Following a ‘gangbusters’ archetypal fractional of the year, the 3rd 4th outturn paints a much realistic representation of the UK’s underlying maturation trajectory fixed longstanding challenges implicit mediocre productivity and persistent proviso broadside constraints."

"Economic maturation successful the last 4th of this twelvemonth is apt to beryllium likewise humble with looming taxation rises and increasing planetary uncertainty apt to spark a renewed restraint to walk and invest, contempt little involvement rates."

The figures travel aft Bank of England policymakers decided to chopped involvement rates by a 4th constituent to 4.75% successful aboriginal November, with different determination connected rates expected successful December. Mr Thiru added: "In spite of these downbeat figures, a December argumentation loosening looks improbable arsenic complaint setters volition apt beryllium acrophobic capable implicit ostentation risks from the Budget and increasing planetary headwinds to defy signing disconnected back-to-back involvement complaint cuts."

Luke Bartholomew, lawman main economist astatine concern elephantine Abrdn, commented: "With enactment maturation successful September being reported arsenic peculiarly weak, it is plausible that immoderate of slowing is the effect of elevated uncertainty astatine that time, arsenic firms and households speculated astir imaginable taxation changes up of the Budget. " "That said, it is besides imaginable that this conscionable represents mean monthly volatility alternatively than thing much fundamental."

"In immoderate regard, the contents of the Budget ended up somewhat boosting the maturation and ostentation representation for 2025, and truthful successful that discourse these information volition astir apt bash small to alteration the reasoning astatine the Bank of England."