Economy flatlines under Labour as growth is revised down to ZERO in months after election amid fears of a 2025 'recession made in Downing Street'

Economy flatlines under Labour as growth is revised down to ZERO in months after election amid fears of a 2025 'recession made in Downing Street'

Labour is facing fresh questions about its stewardship of the economy today as official growth figures were revised down to zero. 

The Office for National Statistics said UK GDP flatlined in the three months from July, when Sir Keir Starmer swept to power.

The government is already under mounting pressure over the October Budget, which  critics say hammered firms with huge cost increases.

Last night the The Confederation of British Industry (CBI)said the economy was heading for the 'worst of all worlds' in 2025 as businesses grapple with Chancellor Rachel Reeves' 'tax-bomb' fiscal statement.

The employers' organisation said the outlook for the start of 2025 was 'firmly negative' across all main sectors, including manufacturing, services and retail – with firms directly blaming the £25 billion Budget hike in employers' National Insurance. 

Shadow chancellor Mel Stride said: 'Today's figures demonstrate the latest failure at the hands of this Chancellor.

'The Labour Government must now urgently revisit their disastrous budget and align economic policy with growth not decline. Every moment of delay is further damaging business confidence, output and employment.

'The warning lights are flashing.'

The ONS today said that UK gross domestic product (GDP) showed no growth between July and September, in the run up to the Autumn budget.

Statisticians had previously estimated 0.1 per cent growth for the quarter.

The ONS also revised down its growth reading for the second quarter of 2024, to 0.4 per cent. In September, it said it thought GDP had increased by 0.5 per cent, which was itself a reduction on previous estimates.

ONS director of economic statistics Liz McKeown 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.

'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 morning Ms Reeves said: 'The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge.

'But this is only fuelling our fire to deliver for working people. 

'The Budget and our Plan for Change will deliver sustainable long-term growth, putting more money in people's pockets through increased investment and relentless reform.'

Monday's downward revision was partly linked to a weaker performance across the important services industry.

Services output failed to grow over the third quarter of the year, revised down from a previous estimate of 0.1 per cent.

This came after experts said consumer-facing services firms only saw 0.1 per cent growth, down from a previous reading of 0.5 per cent.

It said this came after bars and restaurants, and legal services firms recorded a weaker than previously expected performance.

The ONS also said the production sector saw slightly weaker growth than previously thought, on the back of a downgrade for manufacturing firms.

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