UK financial system flatlines as finance minister decries inflation drag

UK financial system flatlines as finance minister decries inflation drag

Skyscrapers within the Canary Wharf monetary, enterprise and buying district in London, UK.

Bloomberg | Bloomberg | Getty Pictures

The U.Okay. financial system flatlined within the third quarter, preliminary figures confirmed Friday.

Gross home product confirmed no quarterly development within the the three months to the tip of September, following a rise of 0.2% the earlier quarter. In annual phrases, Britain’s third-quarter GDP was 0.6% larger than in the identical interval in 2022.

Companies sector output dropped 0.1% on the quarter, however the decline was offset by a 0.1% improve in development efficiency, whereas the manufacturing sector flatlined.

U.Okay. Chancellor of the Exchequer Jeremy Hunt mentioned excessive inflation stays the “single best barrier to financial development” within the nation, with the patron worth index remaining at 6.7% year-on-year in September.

“The easiest way to sustainably develop our financial system proper now’s persist with our plan and knock inflation on its head,” Hunt mentioned.

“The Autumn Assertion will deal with how we get the financial system rising healthily once more by unlocking funding, getting individuals again into work and reforming our public providers so we will ship the expansion our nation wants.”

Lindsay James, funding strategist at Quilter Traders, mentioned the Friday figures confirmed an incoming slowdown that has been more and more signaled by main indicators in current months, with client spending and enterprise exercise exhibiting cracks which have additionally softened labor demand.

“September’s information did positively shock because of the U.Okay.’s robust providers sector, however was not sufficient to offset July’s detrimental print and produce any development in Q3 relative to the earlier quarter. Whereas by some means avoiding a recession this 12 months, at the moment’s no development studying means the UK financial system is flatlining with solely 0.2% financial development within the final six months.” she mentioned.

“Sadly, for a lot of the financial ache has solely been delayed. Because the Financial institution of England said earlier this month that greater than half of the impression of upper rates of interest on the extent of GDP remains to be to come back by, the U.Okay. financial system faces rising headwinds as we strategy 2024.”

Unique information supply Credit score:

You must be logged in to post a comment Login