UK economy still struggles after Budget in ONS GDP figures | Personal Finance | Finance
The UK economy grew by 0.1% between October and December last year, according to the Office for National Statistics (ONS). Alongside the quarterly data, the ONS also released its GDP estimate for December this morning.
The figures show that the economy grew by 0.1% in December compared with the previous month. However, November’s growth figure was revised down, from 0.3% to 0.2%. Meanwhile, constuction contracted -2.1% whilst services showed no growth, however, production grew by 1.2%.
Meanwhile, constuction contracted -2.1% whilst services showed no growth.
Victoria Scholar, head of investment at Interactive Investor, said the budget shed a “cloud of uncertainty”.
She said: “It is likely that economic activity picked up after the budget once that cloud of uncertainty shifted to the rearview mirror in December.
“Plus, there could have been an improvement in the services sector with consumers spending on things like food and beverages, retail, and hotels around the festive season.”
The fourth quarter as a whole hampered by worries about the budget has seen key indicators point towards an improvement in the key services sector, as consumer spending rises.
Chancellor Rachel Reeves said in response to the fourth-quarter GDP figures: “Thanks to the choices we have made, we’ve seen six interest rate cuts since the election, inflation falling faster than predicted and ours is the fastest growing G7 economy in Europe.
“The Government has the right economic plan to build a stronger and more secure economy, cutting the cost of living, cutting the national debt and creating the conditions for growth and investment in every part of the country.”
Reeves is under further intense pressure after the Bank of England downgraded its growth forecasts, painting a bleak picture for workers.
The Chancellor, who has insisted economic growth is her top priority, was hit with the grim outlook last week as the central bank held interest rates at 3.75%, but signalled cuts could come soon to ease pressure on households.
In a further blow The Bank of England said on Thursday last week it believes the economy grew by 1.4% last year, reducing its previous estimate of 1.5%.
It also cut its growth forecast for 2026, from 1.2% to 0.9%, and for 2027, from 1.6% to 1.5%.
