Consumers and guests on London’s Oxford Avenue courageous the unhealthy climate utilizing Union Flag umbrellas on sixth Might 2024.
Mike Kemp | In Footage | Getty Photographs
The U.Okay. economic system grew a meager 0.1% within the third quarter, in line with preliminary figures from the Workplace for Nationwide Statistics, marking one of many final main items of financial knowledge to be launched forward of the Autumn Finances.
Economists polled by Reuters anticipated the economic system to have grown 0.2% over the July-September interval, following an enlargement of 0.3% within the second quarter.
Month-on-month, the economic system shrank by 0.1% in September, following no development in August (which was revised down from a 0.1% enlargement within the ONS’ earlier knowledge).
“Development slowed additional within the third quarter of the 12 months with each companies and development weaker than within the earlier interval. There was additionally an additional contraction in manufacturing,” Liz McKeown, director of Financial Statistics on the ONS, mentioned on Thursday.
Throughout the quarter as an entire manufacturing drove the weak spot in manufacturing, the ONS mentioned, highlighting the cyber assault on Jaguar Land Rover, which halted manufacturing for 5 weeks, as a serious supply of financial disruption.
“There was a very marked fall in automotive manufacturing in September, reflecting the influence of a cyber incident, in addition to a decline within the often-erratic pharmaceutical trade,” McKeown mentioned in feedback posted on social media platform X.
Finances enhance, or blow?
The info comes forward of the British authorities’s extremely anticipated Autumn Finances on Nov. 26, at which Finance Minister Rachel Reeves is anticipated to announce contemporary tax hikes with the intention to fill a fiscal black gap.
There are considerations that tax hikes may put a dampener on client spending and financial exercise, however the economic system may get a pre-Christmas enhance if the Financial institution of England cuts rates of interest at its final assembly of the 12 months on Dec. 18.
Responding to the newest development knowledge, Reeves mentioned: “At my Finances later this month, I’ll take the honest selections to construct a robust economic system that helps us to proceed to chop ready lists, lower the nationwide debt and lower the price of residing.”
Rachel Reeves, U.Okay. chancellor of the exchequer, delivers a speech in London, UK, on Tuesday, Nov. 4, 2025.
Bloomberg | Bloomberg | Getty Photographs
“All eyes will now be on the upcoming Finances with one other weak GDP studying solely including to debates round which levers the Chancellor can pull to stimulate development,” Scott Gardner, funding strategist at JPMorgan Private Investing, mentioned in emailed evaluation.
“In our view, boosting housing market exercise is essential to unlocking respectable, sustained development … That mentioned, with tax rises all however confirmed, consumption and, in flip, companies spending may face extra headwinds from the second quarter of subsequent 12 months when tax and spend measures may come into place. It stays all to play for,” he added.
Amanda Blanc, chief govt of Aviva, advised CNBC’s “Squawk Field Europe” on Thursday that the finances “cannot come quickly sufficient,” with companies and shoppers seemingly nervous about what’s in retailer. “You may take care of certainty, what you’ll be able to’t take care of is concept,” she mentioned.
At its most up-to-date assembly final week, the Financial institution of England held off trimming charges with BOE Governor Andrew Bailey telling CNBC that he and the financial institution’s financial coverage committee needed to see one other batch of inflation and labor market prints earlier than performing.
Rob Wooden, chief U.Okay. economist at Pantheon Macroeconomics, was among the many economists anticipating a Christmas charge lower whether or not the newest GDP knowledge confirmed a bounce, or not.
“We consider the MPC [BOE’s monetary policy committee) would reduce rates in December even with an upside GDP surprise, as a likely contractionary Budget on November 26 dominates its deliberations,” Wood said in emailed analysis ahead of the GDP data.
“But growth is proving resilient, running close to the U.K.’s potential of 0.3% quarter-to-quarter despite strong headwinds from fiscal and global uncertainty.”
Wood believed that resilient growth would limit the emergence of spare capacity, making it trickier for the BOE to cut interest rates again in 2026, although some economists predict there could be two rate cuts next year.
