Rachel Reeves has received a new blow after new figures revealed that UK economic growth slowed in the third quarter of the year.
According to the Office for National Statistics (ONS), the economy grew by an unrevised 0.1 per cent between July and September, while expansion was weaker than first thought in the second quarter, according to official figures.
The ONS confirmed growth slowed in the third quarter after the cyber attack at Jaguar Land Rover knocked activity in the manufacturing sector.
When Labour won power, Ms Reeves promised that the government’s number one mission was to deliver higher economic growth.
But after two Budgets, she has been accused of bringing in anti-growth measures, including tax hikes.
The ONS said that output was also worse than first thought in the previous three months, with gross domestic product (GDP) expanding by 0.2 per cent in the three months to June, revised down from the previous estimate of 0.3 per cent growth.
The ONS also revised up growth for the final quarter of last year, to 0.3 per cent from 0.2 per cent previously recorded, although the out-turn for 2024 as a whole was left unchanged at 1.1 per cent growth.
Liz McKeown, ONS director of economic statistics, said: “Today’s updated figures paint the same picture as our initial estimate, with growth continuing to slow in the third quarter.
“Growth in services were partially offset by falls in production, with a marked drop in car manufacturing.”
Despite the second quarter revision, the UK economy remained the joint fastest growing economy in the G7 group of countries, alongside Japan, with growth of 0.9 per cent, followed by the US.
A Downing Street spokesman denied that the economic news for the UK is all bad.
On economic growth, he said: “We are, course, always seeking to do more on growth. The economy has grown faster than expected this year, and most forecasts have been upgraded.”
The spokesman added: “Living standards dropped last parliament that were working to improve them. Real wages have risen more in the last year than in the first 10 years of the previous government.
“This Budget included help with energy bills, prescription fees, fuel duty and rail fares are expected to help lower inflation next year.
“Inflation fell to 3.2 per cent in November, and lower interest rates, six of them so far since the election, will help people and businesses borrow and spend and we've also raised the national living wage, giving full time low earners £900 more a year, and those on the national minimum wage at £1500 more a year.”
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