The UK economy flatlined in the third quarter of 2024, according to revised official figures released on Monday.
UK gross domestic product (GDP) showed no growth between July and September in the run up to Chancellor Rachel Reeves’s first Autumn budget.
Statisticians had previously estimated 0.1 per cent growth for the quarter.
The Office for National Statistics also revised down its growth reading for the second quarter of 2024, to 0.4 per cent. In September, it said it thought GDP had increased by 0.5 per cent, which was itself a reduction on previous estimates.
GDP is estimated to have shown no growth in Quarter 3 (July to Sept) 2024, revised down from the initial estimate of +0.1% growth.
— Office for National Statistics (ONS) (@ONS) December 23, 2024
Read more ➡️ https://t.co/SOp8PSd5Mm https://t.co/iq61tirk7R pic.twitter.com/JVq9hfc1vv
The downbeat economic readings provide a blow to Ms Reeves and the Government’s hopes to grow the economy rapidly.
Ms Reeves said in a statement: "The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge. But this is only fuelling our fire to deliver for working people.
"The Budget and our plan for change will deliver sustainable long-term growth, putting more money in people's pockets through increased investment and relentless reform."
Chief Secretary to the Treasury Darren Jones described a "disappointing set of economic statistics as we end 2024".
“This Labour government is going into 2025 with absolute resolve to work with investors, wealth creators and workers across the country to stimulate economic growth and improve living standards for workers across the country,” he said.
"This is our number one mission as a Government, and we start from a disappointing set of economic statistics as we end 2024. "So that's why we're going to fight every day to make sure that we improve the lives of working people across this country."
It comes after a major survey by the Confederation of British Industry (CBI) found businesses expected to reduce both output and hiring.
Measures announced in Labour’s first budget, including hiking minimum wage and increasing employer National Insurance Contributions (NICs), were partly blamed.
Alpesh Paleja, the CBI's interim deputy chief economist, said: "There is little festive cheer in our latest surveys, which suggest that the economy is headed for the worst of all worlds - firms expect to reduce both output and hiring, and price growth expectations are getting firmer.
"Businesses continue to cite the impact of measures announced in the Budget - particularly the rise in employer NICs - exacerbating an already tepid demand environment.
"As we head into 2025, firms are looking to the Government to boost confidence and to give them a reason to invest, whether that's long overdue moves to reform the apprenticeship levy, supporting the health of the workforce through increased occupational health incentives or a reform of business rates.
"In the longer term, businesses will be looking to the industrial strategy to provide the stability and certainty which can unlock innovation and investment.”
ONS director of economic statistics Liz McKeown said: “The economy was weaker in the second and third quarters of this year than our initial estimates suggested with bars and restaurants, legal firms and advertising, in particular, performing less well.
“The household saving ratio fell a little in the latest period, though remains relatively high by historic standards.
“Meanwhile, real household disposable income per head showed no growth.”
Shadow chancellor Mel Stride said that "growth has tanked on Labour's watch".
"Having inherited the fastest-growing economy in the G7, growth has tanked on Labour's watch,” he added.
"That means greater pressure on our public finances and an economy which, far from becoming more secure, is becoming significantly more vulnerable.
"The Labour Government must now urgently revisit their disastrous budget and align economic policy with growth not decline. Every moment of delay is further damaging business confidence, output and employment.
"The warning lights are flashing."
