UK Economic Growth Slows to 0.1% in First Quarter Under Labour Government

November 15, 2024
UK Economic Growth Slows to 0.1%

According to data from the Office for National Statistics (ONS), the UK economy grew more slowly during the first three months of the Labour government.

Between April and June, the GDP expanded by 0.1%, which was less than the 0.5% increase seen in the previous quarter.

Chancellor Rachel Reeves expressed her dissatisfaction with the numbers, saying they were "not satisfied" with the 0.2% forecast by economists.

It comes just a few weeks after Reeves unveiled a rise in business taxes in Labour’s first Budget in government last month.

The chancellor said: “Improving economic growth is at the heart of everything I am seeking to achieve, which is why I am not satisfied with these numbers.

“At my Budget, I took the difficult choices to fix the foundations and stabilise our public finances.

“Now we are going to deliver growth through investment and reform to create more jobs and more money in people’s pockets, get the NHS back on its feet, rebuild Britain and secure our borders in a decade of national renewal.”

The services sector, which makes up the bulk of the economy, showed no growth in September and grew by just 0.1% during the period.

Factory output fell 0.2% over the three months driven by a larger decline in the month of September, while the construction sector grew 0.8% over the quarter.

ONS Director of Economic Statistics Liz McKeown said that "production fell overall" in Labour's first GDP quarter figures.

“The economy grew a little in the latest quarter overall as the recent slowdown in growth continued. Retail and new construction work both performed well, partially offset by falls in telecommunications and wholesale. Generally, growth was subdued across most industries in the latest quarter," she said in a statement on Tuesday.

“In September the economy shrank a little. Services showed no growth with a notable increase in car sales offset by a slow month for IT companies. Production fell overall, driven by manufacturing, though there was an increase in oil and gas extraction.”