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British Queen celebrates

 

The UK economy showed no growth in the third quarter, according to revised figures released by the Office for National Statistics (ONS) on Monday. The ONS downgraded its estimate for gross

domestic product (GDP) growth from 0.1% to 0.0% for the July-to-September period, signaling further signs of economic stagnation.

Additionally, the ONS revised its second-quarter growth figure down from 0.5% to 0.4%, highlighting the challenges facing the new government under Prime Minister Keir Starmer. Starmer, who assumed office in early July alongside Finance Minister Rachel Reeves, inherited an economy struggling with sluggish growth. The pair have since introduced tax increases for employers as part of an October budget aimed at fostering sustainable development.

The Bank of England has forecast zero growth for the fourth quarter but opted to keep interest rates unchanged last week, citing ongoing concerns over inflation.

Reacting to the updated figures, Reeves acknowledged the scale of the economic challenges, attributing them to "15 years of neglect" under previous Conservative-led administrations. She reiterated that her budget measures were designed to support long-term, sustainable growth.

The data revealed stagnation in the services sector, with no growth recorded in the third quarter. A 0.7% increase in construction output was offset by a 0.4% decline in production. Among the hardest-hit sectors were bars, restaurants, legal services, and advertising.

Households also faced mounting pressure, with no improvement in living standards. The ONS reported that households dipped into their savings, although savings levels remain relatively high by historical standards.

On a brighter note, the UK's current account deficit narrowed to £18.1 billion in the third quarter, down from £24 billion in the second quarter. This was a better outcome than the £22.5 billion shortfall predicted by a Reuters poll of economists.

Despite the data, sterling remained largely unchanged in the markets. Photo by Tristan Surtel, Wikimedia commons.