Britain’s economy recorded zero growth in the third quarter of 2024, according to revised figures from the Office for National Statistics (ONS), down from an earlier estimate of 0.1%. This flatlining performance coincides with the first months of Prime Minister Keir Starmer’s government, which took office in July amid warnings of economic challenges. Analysts suggest the downturn reflects weaker export demand and signals stagnation for the second half of the year. Despite no contraction, concerns of recession loom as businesses face rising taxes announced in an October budget.
The Bank of England (BoE) predicts no growth for the fourth quarter, citing inflation risks and fragile economic conditions. Business sentiment has declined sharply, with Lloyds Bank reporting confidence at its lowest in 2024 and the Confederation of British Industry forecasting reduced activity and persistent price increases in early 2025. The sluggish services sector, weak production, and household savings depletion further underscore the economic malaise, which has alarmed employers and policymakers alike.
Finance Minister Rachel Reeves defended the government’s measures, emphasizing the long-term focus of recent reforms. However, opposition parties and economists are urging a rethink of upcoming tax hikes to prevent further damage to business confidence. While construction saw modest growth in Q3, other key sectors reported declines, including bars, restaurants, and legal services. With no immediate recovery, experts are cautiously optimistic about potential improvement in 2025 but warn of continued challenges in the interim.