- Gross domestic product showed no growth in the three quarters to the end of September, after rising 0.2% in the previous quarter.
- British Finance Minister Jeremy Hunt said high inflation remains the country’s “biggest obstacle to economic growth.”
Skyscrapers in the financial, business and shopping district of Canary Wharf in London, UK.
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The British economy stagnated in the third quarter, initial figures showed on Friday.
Gross domestic product recorded no quarterly growth in the three months to the end of September, after rising 0.2% in the previous quarter. On a year-on-year basis, UK GDP was 0.6% higher in the third quarter than in the same period in 2022.
Output in the services sector fell 0.1% quarter-on-quarter, but the decline was offset by a 0.1% increase in construction output, while the manufacturing sector remained stagnant.
British Finance Minister Jeremy Hunt said high inflation remained the “biggest obstacle to economic growth” in the country, with the consumer price index remaining at 6.7% year-on-year in September.
“The best way to grow our economy sustainably right now is to stick to our plan and turn inflation on its head,” Hunt said.
“The Autumn Statement will focus on how we get the economy back to healthy growth by unlocking investment, getting people back to work and reforming our public services so we can deliver the growth our country needs.”
Lindsay James, investment strategist at Quilter Investors, said Friday’s numbers confirmed an impending slowdown increasingly signaled by leading indicators in recent months, with consumer spending and business activity showing cracks that have also dampened labor demand.
“While September data surprised positively thanks to the strong UK services sector, it was not enough to offset July’s negative numbers and drive quarter-on-quarter growth in the third quarter. Although a recession was somehow avoided this year, today’s result means no growth for the UK.” The economy is stagnating, with economic growth of just 0.2% in the last six months. She said.
“Unfortunately, for many, the economic problems have only been delayed. With the Bank of England saying earlier this month that more than half of the impact of higher interest rates on GDP levels is yet to be realized, the UK economy faces increasing headwinds as we approach 2024.”