New figures have seen an estimate for economic growth downgraded to non-existent, creating a new nightmare for Rachel Reeves.
Data for Quarter 3 (July to September) 2024 has been revised down from an initial estimate of +0.1% growth by the Office for National Statistics (ONS).
Experts estimate that real households’ disposable income per head showed no growth during the period.
This followed a growth of 1.4% in Quarter 2 (Apr to June) 2024.
The Labour Party won the General Election in July.
The ONS adds that the household saving ratio – the percentage of a household’s net disposable income that is saved – is estimated at 10.1% in Quarter 3 2024, down slightly from 10.3% in the previous quarter.
Further, the UK’s borrowing position with the rest of the world as a percentage of gross domestic product (GDP) is estimated to have decreased to 2.8% in Quarter 3 of 2024, compared with 3.5% of GDP in Quarter 2 of 2024.
Liz McKeown, Director of Economic Statistics at the ONS, said: “The economy was weaker in the second and third quarters of this year than our initial estimates suggested, with bars and restaurants, legal firms and advertising, in particular, performing less well.”
She added: “The household saving ratio fell a little in the latest period, though remains relatively high by historic standards. Meanwhile real household disposable income per head showed no growth.”
This comes as Labour has been accused of creating “a hostile climate for aspiration, investment, and growth” in the UK.
Top business bosses have warned the economy “is headed for the worst of all worlds”, with lower growth and higher prices.
Last week, the Bank of England downgraded its growth forecasts.
A major survey by the Confederation of British Industry published yesterday found expectations for economic growth are now at their lowest since the chaos triggered by Liz Truss’s mini-budget.
Michael Stull, Managing Director of ManpowerGroup UK, said that Ms Reeves’ raid sparked a sudden halt in hiring in November.
He also warned that the increase in NI contributions would hit part-time workers and those in low-paid jobs the hardest.