UK economy stagnant in 3rd quarter in fresh setback

The United Kingdom's economy was stagnant in the third quarter of 2024, according to revised official data released Monday, dealing a fresh blow to the Labour government.

Gross domestic product (GDP) showed zero growth in the July-September period, revised down from an initial estimate of 0.1% growth, the Office for National Statistics (ONS) said in a statement.

The data covers the period of the Labour government's first few months in office in the lead up to its highly-anticipated maiden budget at the end of October.

"The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge," said finance minister Rachel Reeves in response to Monday's figures.

"But this is only fuelling our fire to deliver for working people," she added.

The revised figure lags further behind economic forecasts of 0.2% growth, with analysts partly attributing the slowdown to uncertainty ahead of the budget that included business tax rises and plans for higher state borrowing.

The ONS also revised down its second quarter growth reading to 0.4% from 0.5%.

The data suggests that "the economy ground to a halt in the second half of the year due to a combination of the lingering drag from higher interest rates, weaker overseas demand and some concerns over the policies in the budget," said Paul Dales, chief UK economist at research group Capital Economics.