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The UK economic system unexpectedly grew by 0.1 per cent within the fourth quarter, in a modest enhance for Labour because it seeks to fulfil its pledges to re-energise the economic system.
The GDP determine for the ultimate three months of the yr from the Workplace for Nationwide Statistics marked a rise on the zero development within the quarter that led to September, however remains to be in line with an economic system that’s struggling to achieve momentum.
Economists had forecast a 0.1 per cent fourth-quarter contraction, based on a ballot from Reuters. The pound strengthened after the info launch, up 0.5 per cent in opposition to the greenback at $1.251.
Chancellor Rachel Reeves has vowed to make development the federal government’s chief mission, throwing her assist behind initiatives together with a 3rd runway at London’s Heathrow airport and transport hyperlinks between Oxford and Cambridge.
However the economic system has repeatedly disillusioned since Labour took energy, stagnating within the second half of final yr. Actual GDP per head is estimated to have fallen by 0.1 per cent within the fourth quarter, the ONS mentioned.
The newest information capped a “disappointing yr for development”, mentioned Hailey Low, an economist on the Nationwide Institute of Financial and Social Analysis.
“Low enterprise and shopper confidence counsel that 2025 begins on shaky floor, with weak funding and cautious shopper spending hindering momentum,” she added.
Over the entire of 2024, the economic system expanded by 0.9 per cent, the ONS mentioned, a modest enchancment on enlargement of 0.4 per cent the earlier yr. Nevertheless this fell wanting predictions from October by the Workplace for Funds Accountability, the UK fiscal watchdog.
Annual development was additionally far under that recorded within the US, the place GDP expanded by 2.8 per cent in 2024.
The OBR is anticipated to chop its development forecasts within the upcoming Spring Assertion, hitting tax revenues and including to the fiscal pressures going through the chancellor.
Final week, the watchdog informed Reeves that the headroom she beforehand had in opposition to her key finances rule had been worn out by elements together with poor financial information.
Responding to Thursday’s GDP figures, Reeves mentioned: “For too lengthy, politicians have accepted an economic system that has failed working folks. I gained’t. After 14 years of flatlining dwelling requirements, we’re going additional and sooner by way of our Plan for Change to place extra money in folks’s pockets.”
The ONS figures confirmed that the economic system expanded by 0.4 per cent in December following an unrevised development determine of 0.1 per cent the earlier month. The advance was pushed by output within the UK’s dominant providers sector.
