UK Faces Economic Recession Over Stagnant GDP
The UK economy is heading “for the worst of all worlds” as gross domestic product (GDP) showed no growth in the third quarter of 2024, according to official figures.
The Office for National Statistics said that UK GDP showed no growth between July and September, in the run up to the Autumn Budget. Statisticians had previously estimated 0.1 per cent growth for the quarter.
Alpesh Paleja, the Confederation of British Industry (CBI) interim deputy chief economist said: “There is little festive cheer in our latest surveys, which suggest that the economy is headed for the worst of all worlds – firms expect to reduce both output and hiring, and price growth expectations are getting firmer.”
The impact on employment is particularly severe, with the CBI survey of 899 firms showing that private sector employment “will be cut sharply” in the first quarter of 2025.
Many employers are weighing up whether to cut their workforce to response to the rise in National Insurance at a time when the economy is grinding to a halt.
Alex Perkins, who has run the Weybridge business for the past 16 years, said it was the first time since the recession in 2009 that he had been forced to let staff go.
Andrew Griffith, conservative business spokesman accused Reeves of creating “a hostile climate for aspiration, for investment, and for growth”.
He said: “The Chancellor’s tax-raising spree and trash-talking her economic inheritance is literally killing businesses and jobs.
“If there is a recession – and based on these CBI expectations that seems increasingly likely – it will be one made in Downing Street. Labour need to urgently change course before the damage they are doing becomes even greater.”
Hiring intentions have fallen to their lowest level since October 2020, during the Covid pandemic.
