UK Economy Stalls, But Still Beats the Worst‑Case Scenario
Official figures released by the Office for National Statistics (ONS) show that in the last quarter of 2023 the UK’s GDP essentially sat still – a near‑zero change that was surprisingly better than many analysts had warned about.
Quarterly Numbers
- July‑September (Q3): No growth – essentially 0.0% change.
- September: The ONS reported a modest 0.2% rise, slightly better than the predicted 0.2% down for the quarter.
- August: Revised to a tiny 0.1% growth after an earlier estimate of 0.2%.
- July: A dip of 0.6% – the only negative register in the period.
Key Industries
Services took a hit, especially in health, management consultancy and commercial property rentals. However, gains in engineering, car sales and machinery leasing helped keep the overall picture from sliding into contraction.
Official Comments
Chancellor Jeremy Hunt: “High inflation is the single biggest barrier to economic growth. The best way to sustainably grow our economy right now is to stick to our plan and knock inflation on its head. The Autumn Statement will focus on unlocking investment, getting people back into work and reforming public services so we can deliver the growth our country needs.”
Shadow Chancellor Rachel Reeves: “These figures are further evidence that the economy is not working under the Conservatives and that working people are getting worse off.”
ONS Director of Economic Statistics Darren Morgan: “The economy is estimated to have shown no growth in the third quarter. Services dropped a little with falls in health, management consultancy and commercial property rentals. These were partially offset by growth in engineering, car sales and machinery leasing.”
Pantheon Macroeconomics’ Chief UK Economist Samuel Tombs: “The economy narrowly avoided contracting in Q3, and we continue to think that it can maintain this resilient performance in Q4. We still believe that the chances of a recession look low; we look for a 0.3% quarter‑on‑quarter increase in GDP in Q4 and expect that pace to be broadly maintained next year.”
What’s Next?
The government’s Autumn Statement aims to shift the focus back onto growth – by easing inflation, encouraging investment, putting more people back into work and overhauling public services. It’s a big ask, but the data suggest a steady recovery is plausible.
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