UK economy failed to grow in third quarter

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The UK economy failed to grow in the third quarter, according to the latest government figures, in a fresh blow to the Labor government.

GDP It registered no growth in the three months to September, the Office for National Statistics said on Monday, below the first estimate of a 0.1 percent expansion.

The economy lagged during the quarter as the dominant services sector stagnated. Manufacturing output fell 0.4 percent, offsetting a 0.7 percent increase in the construction sector.

The figures are a shock to the government, which has boosted economic growth at the center of its agenda. Polls pointed to the chilling effect of Chancellor Rachel Reeves’ tax-raising budget in October, which hurt business confidence and dampened hiring intentions.

Reeves on Monday acknowledged the government faced a “huge” challenge but insisted the budget laid the foundations for long-term growth.

If growth undershoots forecasts in the budget, it raises the possibility that Reeves may need to cut spending or pay higher taxes next year to ensure it meets its borrowing rules.

“The challenges we face in fixing our economy and properly funding our public finances after 15 years of neglect are enormous,” Reeves said. “But that’s just fueling our fire to provide for working people.”

Last week, shadow business secretary Andrew Griffiths claimed the UK was heading for a “January of discontent” and the prospect of recession. He said it would be “made in Downing Street” if there was a recession.