Blow For Rachel Reeves As UK Economy Grows By Just 0.1%

The UK economy barely grew at all during the first three months of the new Labour government, it has been revealed.

In a major blow for chancellor Rachel Reeves, the Office for National Statistics said gross domestic product (GDP) went up by just 0.1% between July and September.

That is way down on the previous quarter, when it grew by 0.5%.

Even more worryingly for Reeves, GDP per capita - which is economic output divided by the population - shrank by 0.1% between July and September.

Labour has said that it wants the UK to be the fastest growing economy in the G7 group of wealthy nations.

Reeves said: “Improving economic growth is at the heart of everything I am seeking to achieve, which is why I am not satisfied with these numbers.

“At my Budget, I took the difficult choices to fix the foundations and stabilise our public finances.

“Now we are going to deliver growth through investment and reform to create more jobs and more money in people’s pockets, get the NHS back on its feet, rebuild Britain and secure our borders in a decade of national renewal.”

Liz McKeown, the ONS director of economic statistics, said the figures confirmed “the recent slowdown in growth”.

She added: “Generally, growth was subdued across most industries in the latest quarter.”

Reeves has already faced a wave of criticism for her Budget earlier this month, which increased taxes by £40 billion.

Experts have said her decision to increase the employers’ rate of National Insurance will hit wages.

Shadow chancellor Mel Stride said: “Labour inherited the fastest growing economy in the G7 but because of their choices growth has now slowed significantly. 

“Labour’s National Insurance jobs tax will make it more expensive for businesses which will then fuel higher prices, higher inflation, higher mortgage costs and slower growth.”

Lib Dem Treasury spokesperson Daisy Cooper said: “Today’s disappointing figures underline the scale of the challenge facing our economy after years of reckless mismanagement by the previous Conservative government.

“After a Budget promising to deliver little by way of growth and an unfair tax on small businesses, we need to see a real growth plan from the government. 

“These additional taxes could be the final nail in the coffin for the many small businesses that are already struggling. It’s the last thing our economy needs to get it out of the slow lane.”