New official data has confirmed a marked slowdown in the UK's economic growth, with the crucial Gross Domestic Product (GDP) figure expanding by a mere 0.1% between July and September this year.
Growth Grinds to a Near Halt
The Office for National Statistics (ONS) revealed that the third-quarter growth was weaker than the 0.2% increase recorded from April to June. That previous figure was itself revised down from an initial estimate of 0.3%.
Liz McKeown, ONS director of economic statistics, stated: "Today's updated figures paint the same picture as our initial estimate, with growth continuing to slow in the third quarter." She highlighted that a marked drop in car manufacturing, partially due to the major cyberattack on Jaguar Land Rover which halted production for weeks, contributed to falls in industrial output.
Household Finances Under Pressure
The data also provided a clear signal of the strain on personal finances. The household saving ratio fell by 0.7 percentage points to 9.5%, its lowest level in a year. Furthermore, household disposable income per head dipped by 0.8% in the quarter, following no change in the three months prior.
This economic backdrop prompted the Bank of England to trim interest rates to 3.75% last week in an effort to stimulate activity. The Bank forecasts zero GDP growth for the current October-to-December period, though it believes the underlying pace of growth remains around 0.2% per quarter.
Broader Economic Context and Revisions
While the UK, alongside Japan, had the strongest growth among the G7 advanced economies in the first half of 2024, momentum has slowed significantly since then. Some critics attribute this in part to pre-budget tax uncertainty.
In more positive news, the ONS revised its estimate for the final quarter of 2024 up by 0.1 percentage points to 0.3%. Overall, GDP for the third quarter was 1.3% higher than the same period last year, and the economy grew by 1.1% across 2024 as a whole.
