Gross domestic product (GDP) grew by 0.1 per cent in the last quarter, following no growth in the economy the previous quarter, according to the latest figures from the Office for National Statistics (ONS) figures.
Chancellor Rachel Reeves has promised to "kickstart the economy" and focus on bolstering GDP growth during her tenure in the economy, however analysts will be questioning whether this level will be enough.
Despite the UK avoiding a recession since Labour returned to power, which occurs when an economy experiences two consecutive quarters of negative growth, the current GDP rate appears to be flatlining.
While appearing on GB News this morning, Shadow Chancellor Mel Stride said Reeves is managing an economy "which is going nowhere at all".
In a statement, the Chancellor said: “For too long, politicians have accepted an economy that has failed working people. I won’t. After 14 years of flatlining living standards, we are going further and faster through our plan for change to put more money in people’s pockets.
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GDP in the UK only grew by 0.1 per cent over the last quarter
PA / GETTY"That is why we are taking on the blockers to get Britain building again, investing in our roads, rail and energy infrastructure, and removing the barriers that get in the way of businesses who want to expand."
According to the ONS figures, it is estimated that the economy expanded by 0.4 per cent in December, which is better than most analysts expected. Prior to this, the UK' GDP jumped by only 0.1 per cent in both October and November, coming to 0.1 per cent growth overall for the quarter.
For the full year to December 2024, these latest figures for the ONS mean the economy grew by 0.9 per cent overall in 2024. Monthly services output increased by 0.4 per cent in December 2024, following growth of 0.2 per cent in November 2024 and hike by 0.2 per cent in the three months to December 2024.
In the last month of 2024, production output grew by 0.5 per cent after a fall of 0.5 per cent in November, while production fell by 0.8 per cent in the three months to December 2024, driven by a decline in manufacturing output.
Construction output slipped by 0.2 per cent in December 2024, following growth of 0.6 per cent in November 2024, and grew by 0.5 per cent in the three months to December 2024.
Hailey Low, the National Institute of Economics and Social Research (NIESR)'s associate economist, noted that all eyes will be on the Chancellor's upcoming Spring Budget and the impact of her fiscal statement from October 2024.
She explained: "The UK economy wrapped up 2024 on a flat note, with December’s GDP indicating stagnation in the last quarter and concluding a disappointing year for growth.
"Low business and consumer confidence suggest that 2025 starts on shaky ground, with weak investment and cautious consumer spending hindering momentum.
"It will be crucial to wait and see if the Government's budget spending measures, which come into effect in April, are sufficient to restore optimism and stimulate growth in the medium term.”
David Morrison, the senior market analyst at FCA-regulated fintech and financial services provider at Trade Nation, added: "GDP figures from October-November show some minor positive changes to the economy, after stagnating in the previous quarter.
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Britons are worried about the state of the country's economy
GETTY"However, real GDP per head is estimated to have fallen by 0.1 per cent in October-November. Most positive changes were seen over the services sector, increasing by 0.2 per cent in output terms and construction which grew by 0.5 per cent. However, production fell by 0.8 per cent.
"This better-than-expected number has come as a relief both to financial markets and the Government. The last thing needed at this stage was a quarterly dip into negative territory.
"Nevertheless, the UK economy continues to trundle along with little evidence of growth, although the month-on-month data is encouraging. Sterling jumped on the news, while the pre-market FTSE 100 was holding near all-time highs."
Chancellor Rachel Reeves will outline the Labour Government's updated fiscal agenda on March 26, 2025.
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