Chancellor Rachel Reeves has acknowledged the “huge challenge” of addressing Britain’s struggling economy, following the release of revised official figures showing the economy flatlined during the third quarter of the year.
The Office for National Statistics (ONS) reported no growth in the UK’s Gross Domestic Product (GDP) between July and September, contradicting earlier forecasts that had predicted a modest growth of 0.1%.
The ONS attributed the stagnation partly to weaker trading activity in bars and restaurants, which contributed to the economic slowdown.
These disappointing figures are a setback for the government, which has committed to boosting economic growth.
Business leaders have raised concerns that the UK is heading towards “the worst of all worlds,” with the economy failing to recover as expected.
Chancellor Reeves said, “The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge. But this is only fuelling our fire to deliver for working people.”
She added, ““The Budget and our plan for change will deliver sustainable long-term growth, putting more money in people’s pockets through increased investment and relentless reform.”
The latest figures were released before the Chancellor’s first Budget, which was announced at the end of October.
However, critics, including a spokesperson from Momentum, have questioned Labour’s approach, with the group arguing that the government has failed to provide a clear vision, policies, or the necessary political will to address the economic crisis effectively.
“The latest figures of Britain’s flatlining economy are bad. But what is far worse is that the Labour government has not outlined the vision, the policies or the political will required to actually deliver for the majority of British people,” the spokesperson said.
They also raised concerns over Reeves’ ties to asset management firms like BlackRock, accusing the government of enabling the extraction of wealth rather than implementing a transformative economic plan.
In the hospitality sector, UK Hospitality chief executive Kate Nicholls urged the government to reconsider its proposed Budget measures, given the fragile state of the economy.
She warned, “With business confidence already plummeting and a third of hospitality businesses operating at or below breakeven, the planned changes to employer National Insurance contributions will make generating economic growth even more difficult.”
