UK GDP report to show how economy fared in Labour government’s first quarter – business live

ONS Director of Economic Statistics Liz McKeown says:

“The economy grew a little in the latest quarter overall as the recent slowdown in growth continued. Retail and new construction work both performed well, partially offset by falls in telecommunications and wholesale. Generally, growth was subdued across most industries in the latest quarter.

“In September the economy shrank a little. Services showed no growth with a notable increase in car sales offset by a slow month for IT companies. Production fell overall, driven by manufacturing, though there was an increase in oil and gas extraction.”

The UK economy ended the summer on a weak note, with GDP contracting in September.

Today’s GDP report shows that monthly real GDP is estimated to have fallen by 0.1% in September.

This was largely due to declines in manufacturing output and information and communication services, the ONS says.

While the services sector stagnated in September, production output fell by 0.5% in the month, but construction output grew by 0.1%.

Disappointingly, the economy actually contracted in the last quarter once you adjust for population changes.

Real GDP per head is estimated to have fallen by 0.1% in Quarter 3 2024, and is flat, compared with the same quarter a year ago, the ONS says.

Newsflash: the UK economy has suffered a summer slowdown.

GDP rose by just 0.1% in the July-September quarter, data just released by the Office for National Statistics shows.

That’s down from the 0.5% growth in the second quarter of the year, and weaker than the 0.2% expected.

The scorecard for the Labour govenment’s first quarter in office shows that the services sector grew by 0.1%, while construction grew 0.8%.. but production fell by 0.2% in the quarter.

We’ve also learned overnight that Japan’s economy slowed over the summer.

Japan’s GDP rose by just over 0.2% in July-September, according to new government data that shows the economy grew at an annualised rate of 0.9% in Q3.

That’s a slowdown on Q2, when Japan’s economy grew by around 0.55%.

Although household spending held up in the last quarter, there was a dip in capital spending as firms held back from investment decisions. Net trade also had a negative impact on growth.

Brexit has also been holding back the UK economy, the Bank of England governor warned last night as he urged ministers to “rebuild relations” with the EU.

Speaking at the Mansion House dinner in the City of London on Thursday evening, Andrew Bailey said he took no position on Brexit “per se”, but added: “I do have to point out consequences.”

He said Brexit had “weighed” on the economy, pointing out in particular the impact of Brexit on the UK’s trade in goods, adding:

“It underlines why we must be alert to and welcome opportunities to rebuild relations while respecting the decision of the British people.”

Keir Starmer’s government has pledged to deepen cooperation with the EU, though Brussels has made clear it is unwilling to hold wide-ranging negotiations on the trade and cooperation agreement (TCA).

Labour is opposed to re-entering the EU’s single market or customs union. Instead, the government hopes to win more modest changes such as mutual recognition of professional qualifications and a veterinary agreement that could alleviate the need for checks on food exports.

Good morning, and welcome to our rolling coverage of business, the financial markes and the world economy.

Keir Starmer and Rachel Reeves are about to get their first quarterly growth report since taking office, and it’s not expected to be sparkling.

At 7am GMT the first estimate of UK GDP for the third quarter of 2024 will be released, as well as for September alone.

Economists are expecting the economy grew by 0.2% in July-September, a relatively weak growth rate. That would be a slowdown on the 0.5% growth recorded in April-June, and the 0.7% in January-March.

If that happens, Labour’s gloomy talk since winning the general election in early July is likely to take some other blame. Warnings of a ‘painful’ budget hit confidence among both consumers and businesses, which will have a knock-on impact on spending, and investment decisions.

On the other hand, Reeves could well argue that a slow-moving economy justifies her push for growth – although the extra spending laid out in last month’s budget is only expected to give a short-term lift to economic output…

Previous data have shown that the UK economy stagnated in June and July – as the recovery from last year’s shallow recession faded – before returning to growth in August.

Sanjay Raja, chief UK economist at Deutsche Bank, predicts that the UK economy moved from a “spring sizzle” to a “summer simmer”.

After a solid H1-24, UK growth over summer will likely slow. We expect Q3-24 GDP growth to slow to a more paltry 0.2% quarter-on-quarter.

We see September GDP, which will also be released as part of the GDP data dump, rising by 0.2% month-on-month. Risks are skewed higher on the quarterly print, but lower on the monthly September print, we think.

The agenda

• 7am GMT: First estimate of UK GDP for Q3 2024

• 7am GMT: First estimate of UK GDP for September 2024

• 7am GMT: UK trade balance for Q3 2024

• 8.30am GMT: Hong Kong’s GDP report for Q3 2024

• 9.30am GMT: UK productivity data for Q3 2024

• 1.30pm GMT: US retail sales for October