The UK economy flatlined in the third quarter of 2024, according to revised figures from the Office for National Statistics (ONS), marking no growth compared to the previous estimate of a modest 0.1% expansion. Real GDP per head fell by 0.2% during the quarter, with figures also showing a 0.2% decline compared to the same period last year.
The UK, alongside Italy, recorded the lowest growth among the G7 nations, underperforming expectations. Key sectors such as bars, restaurants, legal firms, and advertising showed weaker-than-expected performance, contributing to the stagnation. Meanwhile, the household saving ratio slightly decreased, though it remains relatively high compared to historical standards, and there was no growth in real household disposable income per head.
The ONS also revised down its growth estimate for Q2 2024 from 0.5% to 0.4%. Chancellor Rachel Reeves acknowledged the UK’s economic challenges, stating that “the challenge to fix our economy is huge.” She added that the government’s plan, which includes increased investment and reform, aims to drive long-term sustainable growth.
Critics, including Labour’s Chief Secretary to the Treasury Darren Jones, stressed the need for collaboration with investors and workers to stimulate growth. Meanwhile, Shadow Culture Secretary Stuart Andrew expressed concern over the lack of growth, calling the situation “really disappointing” and highlighting the impact of the National Insurance increase on confidence.
The outlook for the UK economy remains uncertain as it navigates these challenges.
