The Bank of England established the City of London on November 6, 2024 in London, England. The City of London is a city, ceremonial shire and local government area containing London’s main central business district (CBD). The City of London is widely known simply as “The City” and colloquially as “The Square Mile”. (Photo by Mike Camp/Getty Images)
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The UK economy failed to register any growth in the three months to September. Revised figures Figures released by the Office for National Statistics on Monday.
one preliminary estimate The third quarter report released by the Office for National Statistics last month stated that UK gross domestic product grew by 0.1% during the same period. However, final data released on Monday showed that GDP increased by 0% quarterly.
this GBP It was slightly lower against the U.S. dollar on Monday, trading around $1.2566 as of 8:37 a.m. London time.
Monday’s data dealt another blow to the British economy after a series of weak data dampened sentiment and raised questions about the newly elected Labor government’s fiscal strategy.
earlier this monthData from the Office for National Statistics showed that the British economy unexpectedly shrank by 0.1% in October. This is the second consecutive month of decline in the country’s GDP after falling by 0.1%. September.
Looking ahead, Capital Economics chief UK economist Paul Dales said he expected the UK economy to stall in the final quarter of 2024 as well, but his view was not entirely pessimistic.
“Overall, the data suggest that, after a bumper first half, the economy stalled in the second half, weighed down by rising interest rates, weak overseas demand and some concerns about growth policies in the budget,” he said in a report on Monday.
“Our hunch is that the economy will be better in 2025 than in 2024. But recent data suggests that the economy doesn’t have much momentum as we head into the end of the year.”
Meanwhile, inflation appears to be heading higher again. The Office for National Statistics said last week UK inflation rose to 2.6% in November, marking the second consecutive month of rising prices.
The Bank of England subsequently kept core interest rates unchanged Stable at 4.75%. While markets had expected no rate change at Thursday’s Monetary Policy Committee (MPC) meeting, in a surprise move, three MPC members voted for a rate cut (a Reuters poll expected just one member to vote for it interest rate cut).
Although Governor Andrew Bailey previously sent a signal Four rate cuts are possible next year, with traders divided over when the Bank of England will resume cutting rates. LSEG data shows that the market expects the MPC meeting in February to remain on hold again, with a few traders expecting a 25 basis point interest rate cut in March.
Previously, UK Finance Minister Rachel Reeves late October The Labor government has unveiled its first budget since replacing the long-ruling Conservative government. July.
The budget includes plans by Prime Minister Keir Starmer’s government to raise taxes by 40 billion pounds ($50.5 billion). Reeves said at the time that this would be achieved through a series of new policies, including an increase in employer national insurance contributions, a form of income tax, as well as increases in capital gains tax and Eliminate winter fuel charges to pensioners.
Some policies have been widely criticized. For example, an increase in National Insurance payroll tax has prompted warn From businesses that are unlikely to hire new employees a report Earlier this month, news from recruitment website Indeed suggested the policy was already affecting vacancies in the UK.
