U.K. economy preliminary figures fall short of analyst expectations with 0.1% third quarter

Source Cryptopolitan

The United Kingdom’s Office for National Statistics showed that the country’s economy grew by a meager 0.1%, contrary to analysts’ expectations. The figures drew criticism from commentators as the country gears up for the highly anticipated Autumn Budget.

Preliminary figures from the Office for National Statistics reveal that the U.K. economy grew by 0.1% in the third quarter. The figures represent a slight contrast from the 0.2% that analysts polled by Reuters had anticipated, in line with the 0.3% expansion recorded in the second quarter. 

These figures marked one of the major economic data releases before the highly anticipated Autumn Budget. The data also revealed that the U.K.’s Gross Domestic Product (GDP) increased by 1.3% in Q3 compared to the same quarter in the previous year. The GDP fell by 0.1% in September, following stagnation in August. 

Jaguar Land Rover cyber attack shakes U.K. production output by 2.0%

The Office for National Statistics reported that production output declined by 2.0% in September, with the primary reason being a 28.6% decline in the manufacture of motor vehicles, trailers, and semi-trailers. The decline detracted 0.17 percentage points from monthly GDP. 

ONS Director of Economic Statistics Liz McKeown credited the stunted growth to the impact of the JLR cyberattack on the manufacturing sector, which halted production for more than a month. 

“Across the quarter as a whole manufacturing drove the weakness in production. There was a particularly marked fall in car production in September, reflecting the impact of a cyber incident, as well as a decline in the often-erratic pharmaceutical industry.”

Liz McKeown, Director of Economic Statistics, ONS

The slow growth comes amid growing anticipation for the U.K.’s Autumn Budget, scheduled for release on November 26. Last week, the Finance Minister, Rachel Reeves, announced that she would increase taxes in her imminent budget. She explained to the public that her policy measures intend to focus on “fairness and opportunity,” as pressures mount on public finances that need to be addressed. 

Reeves explained that the critical choices she faces will reshape the future of the U.K. economy and blamed the previous administration for economic mismanagement that has stalled the country’s economic growth and progress.

The official is seemingly bound by her “fiscal rules”, which intend to ensure the government is funded by taxpayers and not on borrowed funds. The rules also bind her choices to ensure the U.K.’s public debt is declining as a share of economic output by 2029-30.

Critics argue the U.K.’s economy is stalling

On the contrary, concerns have emerged over the imminent tax hikes. Critics argue that the tax increase could impact consumer spending. Political and economic media commentator Jamie Jenkins argued that the recent figures are a warning sign. The commentator told his 104k followers on X that the decline recorded in July, August, and September, alongside heightened government borrowing, is bringing the U.K. economy to its knees. 

He also emphasised that the figures do not dispel signs of a growing economy and noted the “170,000 jobs lost since Labour took office” further dictate a stalling economy. However, a more positive outlook suggests a pre-Christmas boost for the U.K. economy if the Bank of England slashes interest rates in its end-of-year meeting scheduled for December 18th.

Cryptopolitan previously reported that the U.K.’s central bank left the country’s key interest rates unchanged at 4% in its last policy meeting, despite inflation remaining above the 2% target. BoE Governor Andrew Bailey said that the committee decided to wait for another batch of inflation and labor market data before taking enforcement actions.

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