Rachel Reeves ‘not satisfied’ with GDP figures as Tories label 0.1% growth ‘disappointing’
Chancellor Rachel Reeves has says she is not satisfied with the latest GDP figures, which shadow chancellor Mel Stride also described this morning as “disappointing”.
The UK economy slowed to a near-standstill in the third quarter as uncertainty surrounding Labour’s first budget and high interest rates weighed on business and consumer spending.
Reeves said: “Improving economic growth is at the heart of everything I am seeking to achieve, which is why I am not satisfied with these numbers.”
She added:
At my budget, I took the difficult choices to fix the foundations and stabilise our public finances. Now we are going to deliver growth through investment and reform to create more jobs and more money in people’s pockets, get the NHS back on its feet, rebuild Britain and secure our borders in a decade of national renewal.
Shadow chancellor Med Stride said on the Today programme that the numbers were “extremely disappointing,” and blamed the Labour government which took power a few days into the third quarter. Pointing out that growth in the US was much higher, Stride said:
I think a lot of that is because this government, on coming to office, talked down the UK economy.
And it did that because it always planned to jack up taxes in the way that it has in the budget, and wanted to make out there was a bigger problem than there was.
We heard about all this fictitious black hole and so on. We’re seeing the consequences of that.
Key events
Heather Stewart
My colleague Heather Stewart has this analysis of today’s GDP figures:
Few could have expected Labour to kickstart an economic renaissance from day one, despite its “mission” to deliver the highest sustained growth in the G7.
But the data will worry the Treasury for two reasons: first, it shows the scale of the challenge ahead; and second, it raises the question of whether the grim mood deliberately created over the summer dented confidence and held back growth.
Of course, many of Labour’s plans for triggering growth are long term, involving knotty structural problems such as planning and infrastructure. And growth had always been expected to slow, after bouncing back strongly from last year’s brief recession to expand by 0.7% in the first quarter of the year, and 0.5% in the second quarter.
But some business groups and analysts were quick to point the finger at the government.
You can read more of Heather Stewart’s analysis here: Few expected Britain to boom but the GDP figures will worry the Treasury
Lib Dems: GDP figures show ‘scale of challenge’ after ‘years of reckless mismanagement’ by Tories
In their reaction to the GDP figures this morning, the Liberal Democrats have said they show the “scale of the challenge” after “years of reckless mismanagement” by the Tories.
The UK economy slowed to a near-standstill, growing by just 0.1% in the third quarter of the year, down from 0.5% in the second quarter.
Treasury spokesperson Daisy Cooper said:
Today’s disappointing figures underline the scale of the challenge facing our economy after years of reckless mismanagement by the previous Conservative government.
After a budget promising to deliver little by way of growth and an unfair tax on small businesses, we need to see a real growth plan from the government.
These additional taxes could be the final nail in the coffin for the many small businesses that are already struggling. It’s the last thing our economy needs to get it out of the slow lane.
The government did not put anybody up in the media round this morning in order to defend the weak GDP figures, but recently appointed Conservative shadow chancellor Mel Stride was across the airwaves to react to them.
He said he had concerns about growth going forward after seeing the figures. He told viewers of Sky News:
If you look at the OBR forecast around the budget, it shows growth being lower across that forecast than it would have been under us back in the spring.
The Conservatives have enjoyed a testy relationship with the OBR in recent months, with former chancellor and shadow chancellor Jeremy Hunt protesting it had been acting in a political manner by scrutinising his figures and the timing of publishing its report on them. After Rachel Reeves’ budget its verdict was that her decisions unlikely to increase economic growth over the next five years.
Stride said that despite these GDP figures including a brief period when the Tories were in government, they fully reflected business sentiment about the incoming Labour administration. He said:
We saw that in what are called PMI surveys of business confidence, and they pretty much plummeted not long after the government came into office. And I think some of that, at least, is what you’re seeing feeding through.
But I think the longer term is equally worrying, because, of course, what the government has done is ramped up taxes on business, national insurance, that’s going to depress wages, increase unemployment, it’s going to lower growth. You’re going to see higher inflation as a consequence, and higher interest rates. And these are things that are not good as an outlook for the future
Today’s GDP report shows that the UK is sitting towards the bottom of the G7 for growth over the summer.
Rachel Reeves ‘not satisfied’ with GDP figures as Tories label 0.1% growth ‘disappointing’
Chancellor Rachel Reeves has says she is not satisfied with the latest GDP figures, which shadow chancellor Mel Stride also described this morning as “disappointing”.
The UK economy slowed to a near-standstill in the third quarter as uncertainty surrounding Labour’s first budget and high interest rates weighed on business and consumer spending.
Reeves said: “Improving economic growth is at the heart of everything I am seeking to achieve, which is why I am not satisfied with these numbers.”
She added:
At my budget, I took the difficult choices to fix the foundations and stabilise our public finances. Now we are going to deliver growth through investment and reform to create more jobs and more money in people’s pockets, get the NHS back on its feet, rebuild Britain and secure our borders in a decade of national renewal.
Shadow chancellor Med Stride said on the Today programme that the numbers were “extremely disappointing,” and blamed the Labour government which took power a few days into the third quarter. Pointing out that growth in the US was much higher, Stride said:
I think a lot of that is because this government, on coming to office, talked down the UK economy.
And it did that because it always planned to jack up taxes in the way that it has in the budget, and wanted to make out there was a bigger problem than there was.
We heard about all this fictitious black hole and so on. We’re seeing the consequences of that.
Welcome and opening summary …
Good morning and welcome to our UK politics coverage for Friday. Here are your headlines …
-
The UK economy slowed to a near-standstill with growth of just 0.1% in the third quarter of the year as uncertainty surrounding Labour’s first budget and high interest rates weighed on business and consumer spending
-
Chancellor Rachel Reeves said: “Improving economic growth is at the heart of everything I am seeking to achieve, which is why I am not satisfied with these numbers”
-
Shadow chancellor Mel Stride has been on the media round, describing the figures, which do partly cover a brief period when his party were still in government, as “disappointing”
-
The Bank of England governor Andrew Bailey has urged ministers to “rebuild relations” with the EU, warning that Brexit has undermined the UK’s economy
-
Leading Tories Robert Jenrick and Oliver Dowden were on the committee that backed plans for the “rushed and misjudged” £15m purchase of an asbestos-ridden site for asylum accommodation
-
The Liberal Democrats are campaigning about bus fares in England. Ed Davey is expected to do a bus-driving stunt later today
The Lords are sitting today, but there is no business in any of the devolved parliaments or assemblies.
It is Martin Belam with you this Friday. The best way to get in touch is email – martin.belam@theguardian.com.