UK economy stagnates in third quarter

Initial expectations of a modest 0.1% expansion were downgraded: GDP flatlined between July and September. CGTN’s Ray Addison reports.

Transcript

00:00Christmas has not brought much cheer for the UK's struggling economy and its new government.

00:07An ONS report says there was no economic growth between July and September,

00:12immediately after the Labour government swept to power.

00:15It also revised down its growth reading for the second quarter of 2024 to 0.4%,

00:22from a previous 0.5%.

00:25And to compound the bad news, the Bank of England has estimated zero growth in the fourth quarter.

00:32So what's to blame?

00:34Well, the ONS says the UK economy was held back by a fall in production output of 0.4%,

00:41largely caused by a fall in energy supply and a decrease in machinery and equipment manufacturing.

00:47Meanwhile, the UK's dominant services sector failed to grow in the third quarter,

00:52with the ONS revising down its previous estimate of 0.1% to 0%.

00:58It's the latest blow to a government that said it wanted the fastest economic growth in the G7,

01:04but whose tax-raising autumn budget to plug holes in public finances may have dented business confidence.

01:11The Confederation of British Industry has responded, saying the economy is

01:17headed for the worst of all worlds, with firms expecting to

01:25The group blamed the recently announced rise in employer national insurance contributions,

01:30which they believe exacerbated a

01:35How worse can it get? It could fall into recession.

01:37Now the good news is, actually what you've seen is,

01:40actually there are underlying elements in a global, slowing global economy,

01:43there are areas that are more positive, which don't get really picked up by a lot of the economic data.

01:48For instance, a lot of the technology areas.

01:50Britain, in terms of its financial structure, is going to have to try and restructure itself.

01:54It will do, but it's going to take time.

01:56Today, the UK Chancellor accepted that she faced a

02:00but blamed 15 years of neglect by the previous Conservative government,

02:04and insisted that she has laid the foundations for the long-term economic growth that Labour has pledged to deliver.

02:11Ray Addison, CGTN.