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The latest GDP data published by the Office of National Statistics (ONS) shows the UK economy has seen no growth in output in the three months from July to the end of September 2023.
The latest data from the ONS shows the economy grew just 0.2% during September 2023, and 0.1% in August, balancing out a small decline in output across the economy seen in July. Compared to September 2022, GDP has grown 1.3% although output was depressed slightly last year following the death of Queen Elizabeth II and the additional bank holiday due to the state funeral, with Q3 of 2022 seeing the economy as a whole shrink by 0.1%.
Across sectors, services, construction and manufacturing all saw some growth in September, with construction and manufacturing recovering from small declines in output in August 2023. The services sector saw a small decline in growth, from 0.23% in August, to 0.16% in September.
The latest ONS GDP data continues the trend of close-to-zero economic growth seen over the past 18 months, and is broadly in line with estimations set out by the Bank of England earlier this month when it opted to hold interest rates at their current level. The Bank’s forecasts expect the UK to avoid a technical recession (defined as two consecutive quarters of negative growth) but would continue to see GDP stagnate.
Following the publication of the latest ONS GDP data, Chancellor Jeremy Hunt told BBC News that the effects of continued high interest rates, currently at their highest level in 15 years, was behind the slow growth seen in the UK economy. The Bank of England however has said rates would remain close to their current level for the next year before they could be reduced gradually as inflation continues to fall towards the 2% target level.
The Chancellor is now expected to announce measures to boost growth in his upcoming Autumn Statement, planned for 22nd November.