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UK gross domestic product (GDP) is estimated to have stagnated during the third quarter of the year as uncertainty ahead of the budget affected decision making, according to the latest figures from the Office For National Statistics.
The ONS found that UK GDP increased by 0.1% in Quarter 3 (July to Sept) 2024, following growth of 0.5% in Quarter 2 (Apr to June) 2024.
Within the output approach to measuring GDP, the services sector grew by 0.1% on the quarter; the construction sector grew by 0.8%, while the production sector fell by 0.2%.
Within the expenditure approach to measuring GDP, there was an increase in net trade, household spending, business investment, and government consumption in expenditure terms in the latest quarter.
Nominal GDP is estimated to have increased by 0.8% in Quarter 3 2024, mainly driven by increases in compensation of employees and other income.
ONS director of economic statistics Liz McKeown said: “The economy grew a little in the latest quarter overall as the recent slowdown in growth continued. Retail and new construction work both performed well, partially offset by falls in telecommunications and wholesale.
“Generally, growth was subdued across most industries in the latest quarter.”
Ben Jones, CBI Lead Economist said: “The UK economy stalled over the third quarter. Uncertainty ahead of the budget probably played a big part, with firms widely reporting a slow-down in decision making. Hopefully this will prove to be a blip. We still expect the economy to return to a path of modest growth in the year ahead. But downside risks to the outlook have increased.
“The budget has set off warning lights for business. The hike in National Insurance Contributions alongside other increases to employers’ cost base will add to the burden on business. And it is expected to trigger a more cautious approach to pay, hiring and investment as companies work through what it means for their own budgets.”
He added: “The Government must stay the course to drive long-term growth with policies that give business certainty and confidence to invest. Firms are looking for signs of progress on its Industrial Strategy, for example, or on reforms to business rates and the apprenticeship levy. By prioritising these the government can unlock much needed private sector investment in our infrastructure and net zero transition.”
