Rachel Reeves‘ growth drive suffered another blow today as figures showed the economy close to flatlining.
UK plc eked out a 0.1 per cent GDP expansion in the first quarter of the year, worse than analysts had expected.
It came after activity went into reverse in September, dipping by 0.1 per cent over the month.
The grim numbers heap more pressure on the Chancellor ahead of her Budget on November 26 – when she is poised to hammer the country with tax rises again.
Ms Reeves and Keir Starmer have made getting growth the core of their plans, admitting that is the only way to improve living standards.
UK plc eked out a 0.1 per cent GDP expansion in the first quarter of the year, worse than analysts had expected
Rachel Reeves ‘ growth drive suffered another blow today as figures showed the economy close to flatlining
However, her raid on businesses last year – hiking national insurance for employers – has been widely blamed for crushing activity.
ONS Director of Economic Statistics Liz McKeown said:’Growth slowed further in the third quarter of the year with both services and construction weaker than in the previous period. There was also a further contraction in production.
‘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.
‘Services were the main contributor to growth in the latest quarter, with business rental and leasing, live events and retail performing well, partially offset by falls in R&D and hair and beauty salons.’
Ms Reeves said: ‘We had the fastest-growing economy in the G7 in the first half of the year, but there’s more to do to build an economy that works for working people.
‘At my budget later this month, I will take the fair decisions to build a strong economy that helps us to continue to cut waiting lists, cut the national debt and cut the cost of living.’
Shadow chancellor Mel Stride said: ‘Today’s ONS figures show the economy shrank in the latest month, under a Prime Minister and Chancellor who are in office but not in power.
‘Months after the Prime Minister stripped the Chancellor of responsibility for the Budget, Keir Starmer has now lost control of his own Downing Street operation – with his team openly at war with his Cabinet.
‘If the Prime Minister does not have the backbone to control his team, he has no hope of reducing spending.
‘Only the Conservatives have a leader with a backbone and a plan to deliver £47billion of savings – allowing us to cut tax and cut the deficit under our Golden Economic Rule.’
