Rachel Reeves suffers new hammerblow as UK economy barely grows again

Rachel Reeves has suffered a new hammerblow after the UK economy only grew by an unrevised 0.1% between July and September, with expansion in the second quarter weaker than first thought, according to the Office for National Statistics (ONS).

The Office for National Statistics (ONS) confirmed growth slowed in the third quarter after the cyber attack at Jaguar Land Rover knocked activity in the manufacturing sector.

The ONS said gross domestic product (GDP) expanded by 0.2% in the three months to June, revised down from the previous estimate of 0.3% growth.

It also revised up growth for the final quarter of last year, to 0.3% from 0.2% previously recorded, although the out-turn for 2024 as a whole was left unchanged at 1.1% growth.

But output was also worse than first thought in the previous three months, with gross domestic product (GDP) expanding by 0.2% in the three months to June, revised down from the previous estimate of 0.3% growth.

The ONS also revised up growth for the final quarter of last year, to 0.3% from 0.2% previously recorded, although the out-turn for 2024 as a whole was left unchanged at 1.1% growth.

Liz McKeown, ONS director of economic statistics, said: “Today’s updated figures paint the same picture as our initial estimate, with growth continuing to slow in the third quarter.

“Growth in services were partially offset by falls in production, with a marked drop in car manufacturing.”

Recently released Office for National Statistics (ONS) figures also showed the rate of UK unemployment rose to 5.1% in the three months to October, up from 5% in the three months to September.

And the UK average regular earnings growth fell to 4.6% in the three months to October. It was 0.9% higher after taking Consumer Prices Index inflation into account, the ONS said, meaning the rate rose to its highest level for nearly five years and wage growth slipped back further.

The recently released figures also showed the ONS said average regular wage growth also pulled back again, to 4.6% in the three months to October, down from 4.7% in the previous three months, and was 0.9% higher after taking Consumer Prices Index (CPI) inflation into account.

Despite the second quarter revision, the UK economy remained the joint fastest growing economy in the G7 group of countries, alongside Japan, with growth of 0.9%, followed by the US.