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Consumers and guests on London’s Oxford Avenue courageous the dangerous climate utilizing Union Flag umbrellas on sixth Might 2024.
Mike Kemp | In Photos | Getty Photos
The U.Okay. financial system grew a meager 0.1% within the third quarter, in response to preliminary figures from the Workplace for Nationwide Statistics, marking one of many final main items of financial information to be launched forward of the Autumn Price range.
Economists polled by Reuters anticipated the financial 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 financial system shrank by 0.1% in September, following no progress in August (which was revised down from a 0.1% enlargement within the ONS’ earlier information).
“Progress slowed additional within the third quarter of the yr with each companies and building weaker than within the earlier interval. There was additionally an additional contraction in manufacturing,” Liz McKeown, director of Financial Statistics on the ONS, stated on Thursday.
Throughout the quarter as a complete manufacturing drove the weak point in manufacturing, the ONS stated, highlighting the cyber assault on Jaguar Land Rover, which halted manufacturing for 5 weeks, as a significant supply of financial disruption.
“There was a very marked fall in automobile manufacturing in September, reflecting the affect of a cyber incident, in addition to a decline within the often-erratic pharmaceutical trade,” McKeown stated in feedback posted on social media platform X.
Price range increase, or blow?
The info comes forward of the British authorities’s extremely anticipated Autumn Price range on Nov. 26, at which Finance Minister Rachel Reeves is anticipated to announce contemporary tax hikes with a purpose to fill a fiscal black gap.
There are considerations that tax hikes might put a dampener on shopper spending and financial exercise, however the financial system might get a pre-Christmas increase if the Financial institution of England cuts rates of interest at its final assembly of the yr on Dec. 18.
Responding to the newest progress information, Reeves stated: “At my Price range later this month, I’ll take the truthful selections to construct a robust financial system that helps us to proceed to chop ready lists, reduce the nationwide debt and reduce 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 Photos
“All eyes will now be on the upcoming Price range with one other weak GDP studying solely including to debates round which levers the Chancellor can pull to stimulate progress,” Scott Gardner, funding strategist at JPMorgan Private Investing, stated in emailed evaluation.
“In our view, boosting housing market exercise is vital to unlocking respectable, sustained progress … That stated, with tax rises all however confirmed, consumption and, in flip, companies spending might face extra headwinds from the second quarter of subsequent yr when tax and spend measures might come into place. It stays all to play for,” he added.
Amanda Blanc, chief government of Aviva, informed CNBC’s “Squawk Field Europe” on Thursday that the finances “cannot come quickly sufficient,” with companies and customers seemingly nervous about what’s in retailer. “You may cope with certainty, what you possibly can’t cope with is concept,” she stated.
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 reduce whether or not the newest GDP information 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.
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