The UK economy indicated no growth in Q3 2023 despite a 0.2% increase in the previous quarter, according to the latest GDP estimates from the Office for National Statistics (ONS).
The services sector is estimated to have declined by 0.1%, offsetting a 0.1% increase in construction and negligible growth in production.
The property and transport sectors were also adversely affected, while consumer spending and business activity declined due to inflation and higher interest rates.
In expenditure terms, household consumption fell by 0.4%, business investment by 2.0%, and government consumption by 0.5% due to reduced spending on health and education.
Experts such as Suren Thiru from the ICAEW anticipate challenges ahead as businesses express pessimism about their economic prospects, aligning with the ongoing struggle for sustained growth since the financial crisis.
The Bank of England’s decision to maintain a 5.25% interest rate raised concerns, with some economists, including James Smith from the Resolution Foundation, suggesting a reevaluation to stimulate growth.
In light of the GDP estimates, Chancellor Jeremy Hunt pledged to use the upcoming Autumn Statement to boost economic health and “knock inflation on its head”.
Darren Morgan, director of economic statistics at ONS, said:
“The economy is estimated to have shown no growth in the third quarter. Services dropped a little with falls in health, management consultancy and commercial property rentals. These were partially offset by growth in engineering car sales and machinery leasing.”
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