Rachel Reeves faces new nightmare as economic growth deteriorates | United Kingdom | News
New figures have seen economic growth estimates downgraded to non-existent, creating a new nightmare for Rachel Reeves.
Data for the third quarter (July to September) 2024 has been revised downwards from an initial estimate of +0.1% growth by the Office for National Statistics (ONS).
Experts estimates that the real disposable income of households per capita showed no growth over the period.
This follows growth of 1.4% in the second quarter (April to June) 2024.
The Labor Party won the July parliamentary elections.
The ONS adds that the household savings rate – the percentage of a household’s net disposable income that is saved – is estimated at 10.1% in the third quarter of 2024, down slightly from 10.3% in the previous quarter.
Additionally, the UK’s borrowing position from the rest of the world as a percentage of gross domestic product (GDP) is estimated to have declined to 2.8% in the third quarter of 2024, from 3.5% of GDP in the second quarter. quarter 2024.
Liz McKeown, director of economic statistics at the ONS, said: “The economy was weaker in the second and third quarters of this year than our initial estimates suggested, bars and restaurants, law firms and advertising, in particular, having recorded poorer performances. “
She added: “The household savings rate has fallen slightly over the latest period, although it remains relatively high by historical standards. Meanwhile, real household disposable income per capita has not showed no growth.”
It comes as Labor has been accused of creating “a climate hostile to aspiration, investment and growth” in the UK.
Top business leaders have warned that the economy is “heading towards the worst of all worlds”, with weaker growth and higher prices.
Last week, the Bank of England cut its growth forecasts.
A major survey from the Confederation of British Industry published yesterday reveals that expectations for economic growth are now at their lowest level since the chaos sparked by Liz Truss’ mini-budget.
Michael Stull, managing director of ManpowerGroup UK, said Ms Reeves’ raid triggered a sudden halt in hiring in November.
He also warned that the increase in NI contributions would hit part-time workers and those in low-paid jobs hardest.