UK economy grows by a meager 0.1% in the third quarter, missing expectations

The U.K. system grew a meager 0.1% successful the 3rd quarter, according to preliminary figures from the Office for National Statistics.

Economists polled by Reuters expected the system to person grown 0.2% implicit the July-September period, following an enlargement of 0.3% successful the 2nd quarter.

Month-on-month, the system shrank by 0.1% successful September, pursuing nary maturation successful August (which was revised down from a 0.1% enlargement successful the ONS' erstwhile data).

The information comes up of the British government's highly anticipated Autumn Budget connected Nov. 26, astatine which Finance Minister Rachel Reeves is expected to denote caller taxation hikes successful bid to capable a fiscal achromatic hole.

There are concerns that taxation hikes could enactment a dampener connected user spending and economical enactment but the system could get a pre-Christmas boost if the Bank of England cuts involvement rates astatine its past gathering of the twelvemonth connected Dec. 18.

At its astir caller gathering past week, the cardinal slope held disconnected trimming rates with BOE Governor Andrew Bailey telling CNBC that helium and the bank's monetary argumentation committee wanted to spot different batch of ostentation and labour marketplace prints earlier acting.

Rob Wood, main U.K. economist astatine Pantheon Macroeconomics, was among the economists expecting a Christmas complaint chopped whether the latest GDP information showed a bounce, oregon not.

"We judge the MPC [BOE's monetary argumentation committee) would trim rates successful December adjacent with an upside GDP surprise, arsenic a apt contractionary Budget connected November 26 dominates its deliberations," Wood said successful emailed investigation up of the GDP data.

"But maturation is proving resilient, moving adjacent to the U.K.'s imaginable of 0.3% quarter-to-quarter contempt beardown headwinds from fiscal and planetary uncertainty."

Wood believed that resilient maturation would bounds the emergence of spare capacity, making it trickier for the BOE to chopped involvement rates again successful 2026, though immoderate economists foretell determination could beryllium 2 complaint cuts adjacent year.

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