UK growth slower than expected in third quarter

Development within the UK economic system slowed by greater than anticipated to 0.1% within the July-to-September interval, official figures present, as automotive manufacturing slumped. The Workplace for Nationwide Statistics (ONS) stated whereas the service sector was the primary driver of progress within the quarter, weak point in manufacturing led to a contraction within the manufacturing sector.The economic system shrank by 0.1% within the month of September, the ONS stated, when there was a “marked” fall in automotive manufacturing following the affect of the cyber assault on JLR.The expansion figures are the final to be launched forward of the Funds later this month, when Chancellor Rachel Reeves is extensively anticipated to boost taxes with a view to meet her self-imposed borrowing guidelines.Analysts had anticipated progress within the third quarter to be 0.2%. The newest determine marks a slowdown from the 0.3% progress seen within the earlier quarter, and the 0.7% growth within the first three months of the yr.Responding to the ONS knowledge, Rachel Reeves stated the UK had the fastest-growing economic system within the G7 within the first half of the yr, however stated “there’s extra to do to construct an economic system that works for working individuals”. “At my Funds later this month, I’ll take the honest selections to construct a powerful economic system that helps us to proceed to chop ready lists, lower the nationwide debt and lower the price of residing,” she stated. Shadow chancellor Mel Stride stated the prime minister and chancellor have been “in workplace however not in energy” and claimed Sir Keir Starmer had “stripped the chancellor of duty for the Funds”. ONS director of financial statistics Liz McKeown stated that whereas there had been some progress in providers and development, they have been weaker than within the earlier quarter. “Companies have been the primary contributor to progress within the newest quarter, with enterprise rental and leasing, dwell occasions and retail performing effectively, partially offset by falls in R&D and hair and sweetness salons,” she stated. Ruth Gregory, deputy chief UK economist with Capital Economics, stated that even with out the drag on GDP progress by the Jaguar Land Rover cyber-attack, the economic system “is struggling to achieve respectable momentum”.”With tax rises within the upcoming Funds prone to trim GDP by round 0.2% in 2026, there’s little cause to suppose that GDP progress will speed up a lot from right here,” she stated. The weak point of the figures led some analysts to recommend there was now an elevated probability of the Financial institution of England reducing rates of interest when it meets subsequent month.Suren Thiru, economics director for the Institute of Chartered Accountants in England and Wales, stated the figures could also be sufficient “to push a majority of rate-setters to authorise one other coverage loosening”.