The UK’s economic growth slowed significantly in the third quarter as GDP rose only by 0.1%.
- After a promising start to the year, the economy’s growth rate has consistently declined over the subsequent quarters.
- Economists’ expectations of a 0.2% growth were not met as manufacturing output and communication services weakened.
- Retail sales showed a positive trend despite an overall challenging economic environment.
- The approaching months are critical for retailers, who face challenges from consumer confidence and high business rates.
The GDP increase of 0.1% from June to September presents a stark difference from the earlier part of the year, where growth was recorded at 0.5% in the second quarter and 0.7% in the first. This continues a pattern of slowing growth in the UK economy, corresponding to a rise below economists’ hopeful 0.2% prediction.
The latest data shows that in September, GDP contracted by 0.1%, driven by downturns in both manufacturing output and the information and communication services sector. This followed unrevised increments of 0.2% in August and stagnation in July.
In the retail sector, there was a slight cause for optimism as September saw retail sales rise by 2%, followed by a smaller increase of 0.6% in October. Nevertheless, in-store non-food sales experienced a yearly decline of 1.5% for the three months leading up to September, switching from a previous growth rate of 0.3% year-on-year.
Helen Dickinson, CEO of the British Retail Consortium, remarked on the mixed circumstances, noting that autumn prompted consumers to purchase coats, boots, and knitwear. There was also a spike in demand for school-related attire early in the month. She warned, however, that “The coming months are crucial for the economy as retailers enter the ‘Golden Quarter’.” Challenges lie ahead due to weak consumer confidence and the ongoing pressure of business rates, limiting the capacity for reinvestment.
The UK’s economic landscape remains challenging, with modest growth and looming pressures facing key sectors.
