Gross domestic product in the United Kingdom was flat for the last quarter. After an increase of 0.2% in the previous quarter, the three months to the end of September yielded zero growth.
Expressed annually, Britain’s third-quarter GDP was just 0.6% higher than in the same period in 2022.
The services sector output fell 0.1% in the quarter, but the decline was counterbalanced by a 0.1% increase in construction. The production sector was flat.
U.K. Chancellor of the Exchequer Jeremy Hunt has reiterated that high inflation is a major barrier to economic growth. The consumer price index remained at 6.7% year-on-year in September.
To fight its way out of the slump, the U.K. wants to unlock more investment, reduce unemployment and reform its public services to deliver growth.
Analysts are not surprised by the latest figures, confirming that the slowdown had been inevitable after several indicators in recent months telegraphed this result. Consumer spending and business activity have been slow, softening labor demand.
One silver lining from the quarterly results was the U.K.’s strong services sector. However, this was not enough to offset July’s negative performance and produce any growth in Q3 relative to the previous quarter.
What does this mean for me?
While somehow avoiding a recession this year, this latest flatlined growth reading means the UK economy has shown only 0.2% economic growth in the last six months.
Some analysts believe further economic pain has only been delayed. The Bank of England indicated earlier this month that more than half of the impact of higher interest rates on the level of GDP is still to be felt.