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Highlights:
- UK Economy Stagnates: The UK economy saw no growth in the quarter to September, with GDP revised down to 0.0%.
- Weaker Than Expected Second Quarter: Growth in the April to June period was also downgraded, from 0.5% to 0.4%.
- Declines in Key Sectors: Bars, restaurants, legal services, and advertising sectors underperformed during the third quarter.
Newly revised data from the Office for National Statistics (ONS) reveals that the UK economy experienced no growth between July and September, with gross domestic product (GDP) remaining flat. This revised figure overturns an earlier estimate of 0.1% growth during the period. Additionally, economic growth in the previous quarter, from April to June, was downgraded to 0.4% from the previously stated 0.5%.
Sectors Facing Decline
The economic stagnation was influenced by weaker-than-expected performances in key sectors. According to ONS statistics director Liz McKeown, the hospitality industry, including bars and restaurants, as well as legal services and advertising sectors, were notable contributors to the underperformance.
McKeown noted, “The economy was weaker in the second and third quarters of this year than our initial estimates suggested. Bars and restaurants, legal firms, and advertising in particular performed less well.”
Household Indicators
The ONS also reported mixed results regarding household financial health. The household savings ratio fell slightly during the latest period but remained relatively high compared to historic levels. However, real household disposable income per head showed no growth, reflecting ongoing financial challenges for consumers amid broader economic stagnation.
A Complex Economic Landscape
The revisions highlight the complexity of the UK’s economic environment in 2024. While some sectors demonstrated resilience earlier in the year, the lack of growth in the third quarter and downward revision for the second quarter underscore the fragility of the recovery. The stagnation also raises questions about the broader economic outlook, as policymakers and businesses assess strategies to stimulate growth in the face of persistent headwinds.
This flat performance comes amid a challenging global environment, with factors such as inflationary pressures, labor market dynamics, and shifting consumer spending patterns playing significant roles in shaping the economic landscape.
The revised data presents an opportunity for reflection on policy measures and industry responses necessary to support sustained growth and stability in the quarters ahead.
