Revised data reveals zero growth between July and September, heightening concerns for 2025

Revised official figures show that the UK economy stagnated between July and September, marking a period of zero growth. This disappointing update follows a series of concerning economic indicators, including the fastest inflation rise in eight months and an unexpected contraction in October.

The Confederation of British Industry (CBI), one of the nation’s leading business groups, warns that the economy is heading toward a “worst-case scenario.” Their survey of businesses signals a steep decline in activity expected across all sectors in the first quarter of 2025, with expectations at their lowest in over two years.

Chancellor Rachel Reeves acknowledged the immense challenge of restoring the economy, describing it as “huge” after 15 years of what she termed neglect. Meanwhile, Shadow Chancellor Mel Stride took aim at the Labour government, asserting that the figures reflect the damage done under Labour’s leadership. Stride claimed, “growth has tanked on Labour’s watch.”

This revised economic figure represents a blow to the government, which had prioritised boosting the economy as part of its agenda. Despite the gloomy figures, Labour has promised to drive the highest sustained economic growth within the G7 group of nations.

However, the business community is raising alarms about upcoming changes set to take effect in April, including an increase in employer national insurance contributions (NICs) and a higher minimum wage. Many businesses fear these measures will lead to job cuts and price hikes. The CBI’s latest survey suggests that companies across all industries expect a significant downturn in the months ahead.

The British Retail Consortium (BRC), which represents major UK retailers, also issued a warning. Their consumer sentiment survey reported a sharp drop in public confidence, with the prospect of a “January spending squeeze” looming large. As sales growth slows, retailers may have no choice but to raise prices or slash costs, potentially leading to store closures and recruitment freezes.

Mick Dore, the general manager of the Alexander Pub in Wimbledon, said his business faces rising costs due to the upcoming national insurance hike, which will affect its 50 to 60 staff members. While acknowledging the financial pressure, Dore expressed optimism for the future, noting that despite previous warnings of doom, the business had always bounced back.

Despite the growing economic uncertainties, Chancellor Rachel Reeves has remained hopeful that Labour’s budget plans will stimulate long-term growth, focusing on investment and reforms to boost people’s incomes. But with 2025 on the horizon, questions remain about whether these strategies can reverse the downward trend.

SKY NEWS

The UK economy is facing a challenging start to 2025, with businesses anticipating a significant slowdown, according to the Confederation of British Industry (CBI). The industry group’s latest growth survey reveals that private sector firms expect to reduce hiring, cut output, and face rising prices in the first quarter of 2025. The CBI’s report highlights concerns about the impact of rising national insurance contributions (NIC) for employers, which were introduced by Chancellor Rachel Reeves. Businesses have cited this increase as a key factor in their pessimistic outlook.

The survey suggests that the UK economy is at risk of entering a period of stagnation, with the combined effects of high costs, lower hiring, and reduced production creating what the CBI describes as “the worst of all worlds.” This negative forecast follows a difficult period for the economy, as companies struggle to adapt to post-Brexit trade barriers, higher taxes, and ongoing inflation pressures. The CBI has called for government action to stimulate growth and address these mounting challenges, but for now, the outlook remains uncertain as businesses prepare for a tough year ahead.

THE TELEGRAPH

Britain is on the brink of recession after official figures revealed that the economy stagnated in the third quarter of 2024. Growth from July to September was revised down from 0.1% to zero, marking a concerning trend as living standards also fell. The UK and Italy were the only G7 countries to register no growth during this period, underperforming compared to economic powers like Germany, France, and the US. With potential contraction in the final quarter of 2024, Britain risks entering a technical recession, defined by two consecutive quarters of negative growth.

In response to the dismal figures, Chancellor Rachel Reeves acknowledged the significant challenges facing the economy. However, she remained optimistic, asserting that the figures only fueled the government’s determination to implement reforms. Reeves emphasised that the government’s plans, including the Budget and their “Plan for Change,” are focused on delivering sustainable long-term growth, increased investment, and higher public sector support. Despite the bleak outlook, the Labour government is committed to navigating these economic hurdles with policies aimed at improving the financial situation for working people.