Rachel Reeves has been told to hurry up and publish a proper growth plan for Britain, after new GDP figures revealed the economy flatlined in her first quarter.
Critics have labelled the figures as ‘not surprising’ after her ‘disastrous budget’, with several heavyweights claiming the UK has “stalled”.
Despite pledging to restore economic stability and growth, figures from the ONS this morning showed the UK economy growing by just 0.1% in the last quarter, and actually shrank by 0.1% in September.
GDP per capita, a better measure of living standards, also fell between July and September by 0.1%.
The figures are so bad that even Ms Reeves, in a statement this morning, voiced disappointment.
She 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.”
However the Government is already facing vocal criticism that it is not doing enough to secure the economic growth it promised during the election.
The Liberal Democrats said the news was “disappointing”, and Ms Reeves’ planned tax raid “could be the final nail in the coffin for many businesses that are already struggling”.
Daisy Cooper added: “It’s the last thing our economy needs to get it out of the slow lane.”
Former chancellor Nadhim Zahawi described the growth figures as “anaemic”, while Lord Frost said: “The UK economy is stalled.”
BusinessLDN, which promotes the City of London, has also pointed the finger of blame at the Chancellor’s Budget tax rises, warning: “With the economy in the slow lane and many firms reeling from last month’s announcement of an employer national insurance hike, the Government needs to do more to kickstart growth.”
While Conservative London Assembly member Susan Hall said: “I’m sorry but Rachel Reeves can’t be surprised, after her disastrous budget what the heck does she expect?”
Former Jeremy Corbyn advisor Andrew Fisher quipped: “Still looking for that growth level…”
Economists are largely in agreement this morning that uncertainty surrounding Ms Reeves’ Budget, and her gloomy messaging about the economy, are largely to blame for impacting growth over the summer.
Lindsay James of Quilter Investors said that much of the growth stall was “as a result of the gloomy messaging that was persistent in the run up to the budget, causing consumers and businesses to pause spending and await what pain was to come”.
The CBI’s lead economist Ben Jones agreed, saying that the Budget has “set off warning lights for businesses”.
“The UK economy stalled over the third quarter. Uncertainty ahead of the Budget probably played a big part, with firms widely reporting a slow-down in decision making. Hopefully this will prove to be a blip.”
This morning Ms Reeves was dealt an additional blow as the Resolution Foundation revealed Britain has been knocked off the top of the G7 growth leaderboard.
They said that while the UK did have the fastest growing economy in the G7 in the first half of the year – 1.2% – growth has now “run out of steam”.
They report that the slowdown means UK growth has fallen behind the US, although stays slightly ahead of France, Italy and Canada.
Simon Pittaway, senior economist at the Resolution Foundation said: “After bouncing back from recession earlier this year, Britain’s recovery is already running out of steam. The UK has fallen below the US at the top of the G7 GDP growth leaderboard, with growth slowing, wage rises shrinking and employment starting to fall.
“The UK has been a GDP rollercoaster over the past 12 months, but its medium-term performance has been staid and stagnant. Over the past five years, the economy has shrunk by 0.7 per cent once you account for population growth.”
