The latest economic data reveals a modest 0.1% growth in the UK’s GDP for the third quarter.
- Economic growth fell from 0.5% in the previous quarter to 0.1% in the third quarter, below economists’ expectations.
- Manufacturing and information services experienced declines, contributing to the overall slowdown.
- Retail sales increased in September and October, despite a year-on-year drop in in-store non-food sales.
- The retail sector faces challenges due to weak consumer confidence and high business rates.
The United Kingdom’s economy experienced a marginal growth of 0.1% in its GDP during the third quarter of the year, a decrease from the 0.5% growth seen in the previous quarter and the 0.7% growth from the first quarter. This fall short of the 0.2% growth that economists had previously expected, painting a picture of a sluggish economic recovery.
A significant factor contributing to the GDP slowdown was the decline in manufacturing output and information and communication services, leading to a decrease of 0.1% in the month of September alone. This comes after an unrevised 0.2% growth in August and no growth in July, indicating a fluctuating pattern in economic activities over the past few months.
Retail sales in the UK showed a positive trend, with a 2% increase in September, followed by a 0.6% growth in October, according to the British Retail Consortium (BRC) and KPMG figures. Despite these gains, in-store non-food sales fell by 1.5% year on year for the three months leading to September, contrary to the 0.3% growth recorded in the previous year.
Helen Dickinson, CEO of the BRC, highlighted that as autumn approached, there was a consumer shift towards purchasing seasonal clothing like coats, boots, and knitwear. In addition, the start of the academic year saw a last-minute surge in demand for computers and clothing, reflecting consumer spending patterns.
While the upcoming months remain crucial for the economy, potential for further investment by retailers remains limited due to weak consumer confidence and the high burden of business rates. This sentiment captures the cautious optimism in the retail sector as it approaches the critical “Golden Quarter” of trading.
The UK’s economic performance in the third quarter demonstrates the ongoing challenges and limited growth in the face of fluctuating consumer and industrial activities.
