UK economy flatlines in new setback for government

The British economy flatlined in the third quarter of 2024, according to downwardly revised official figures, in another blow to the new Labour government that has made growth its number one mission.

In its latest revision of the July to September period, the Office for National Statistics said the British economy showed no growth against the previous estimate of 0.1 per cent.

The agency partly blamed the reduction on fresh survey data showing weaker trading across bars and restaurants.

The reduction has prompted critics to say Labour talked down the economy on taking power on July 5 for the first time in 14 years when it described its economic inheritance from the previous Conservative administration as being the worst in generations.

Prime Minister Keir Starmer's Treasury chief, Rachel Reeves, promised to turbocharge economic growth after Labour won the July election but has seen the economy stall over the three months to September, while official figures earlier in December also pointed towards a 0.1 per cent decline in October.

"The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge," she said on Monday.

In her first budget in late October, Reeves raised taxes on businesses to help shore up public finances and ailing services.

Many economists say the budget has further damaged the British economy as many businesses are responding to the tax rise by either raising prices or reducing employees or wages.

The Conservatives' economy spokeswoman, Mel Stride, said "warning lights are flashing" on the economy.

"Having inherited the fastest-growing economy in the G7, growth has tanked on Labour's watch," Stride said.