The UK economy flatlined in the third quarter of 2024, with revised figures from the Office for National Statistics (ONS) showing no growth between July and September. Initially, the economy had been reported to have grown by 0.1%, but the revised data revealed that real GDP per head actually fell by 0.2%, marking a 0.2% decline compared to the same quarter a year ago.
This lack of growth places the UK alongside Italy, which also experienced no growth in the G7 nations during the third quarter. The slight growth initially recorded was already slower than expected and represents a sharp drop from the 0.4% growth seen in the second quarter of 2024.
According to Liz McKeown, the director of economic statistics at ONS, several sectors, including bars and restaurants, legal firms, and advertising, performed poorly during this period. She also noted a slight dip in the household saving ratio, although it remains relatively high by historic standards. Real household disposable income per head showed no growth, reflecting the challenging economic conditions.
Chancellor Rachel Reeves acknowledged the “huge” challenge in fixing the economy, citing “15 years of neglect” under the previous Conservative government. She promised that the government’s budget and long-term growth plans would focus on increasing investment and implementing reforms aimed at putting more money into people’s pockets.
Reeves stated that her plan would deliver “sustainable long-term growth” for the country. However, the opposition has criticized the government’s handling of the economy. Shadow culture secretary Stuart Andrew described the figures as “really disappointing” and warned that the economy’s warning signs were evident. He pointed to the national insurance increase, which, while not reflected in the latest data, has caused concern over its potential long-term impact on economic confidence.
