UK Economy Grows By 0.1% in Q3 2024

The UK's gross domestic product (GDP) is projected to have risen by 0.1% in the third quarter of 2024 (July to September), following a growth of 0.5% in the second quarter (April to June) of the same year.

Year-on-year, GDP is estimated to have increased by 1.0% in the third quarter of 2024.

Using the output approach to GDP measurement, the services sector experienced a growth of 0.1% compared to the previous quarter, while the construction sector grew by 0.8%. In contrast, the production sector saw a decline of 0.2%.

From the expenditure perspective, there were increases in net trade, household spending, business investment, and government consumption in the most recent quarter.

Nominal GDP is estimated to have grown by 0.8% in the third quarter of 2024, largely driven by rises in employee compensation and other income.

Real GDP per capita is estimated to have decreased by 0.1% in the third quarter of 2024 and remains unchanged compared to the same quarter last year.

For the month of September, 2024, the economy contracted by 0.1%.

A visual representation of the UK GDP growth over recent quarters.

Interest Rates & Monetary Policy

The Bank of England are yet to comment on the latest growth figures. If these have come to a suprise to them, this may open the doors to further interest rate cuts. Interest rates can be used to stimulate a stagnating economy by reducing the cost of borrowing, encouraging business investment and increasing household spending.

An infographic illustrating growth in the UK services sector.

A Blow to Rachel Reeves

Rachel Reeves said she was "not satisfied" with the latest GDP figures. She promised economic growth would be at the heart of everything she is trying to achieve. The latest news is the complete opposite and is pointing to a stagnating economy, with further worrying signs with a contraction in September. As the economy enters it's golden quarter, particularly for retail and hospitality, the next quarterly update is likely to be interesting. A lack of growth or any contractions in this period could mean it is already time for Labour to reevaluate their policies for economic growth.

Graph displaying the recent trends in consumer confidence in the UK.