Golden Financier
  • Investing
  • Stock
  • Latest News
  • Editor’s Pick
  • Economy

    Become a VIP member by signing up for our newsletter. Enjoy exclusive content, early access to sales, and special offers just for you! As a VIP, you'll receive personalized updates, loyalty rewards, and invitations to private events. Elevate your experience and join our exclusive community today!


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.
    Popular Topics
    • UK’s digital banks face divergent fortunes: Starling stumbles, Monzo and Revolut soars
    • Brent crude oil price forecast after the OPEC+ supply cut
    • Adobe stock price is cheap: is it a good buy?
    • USD/CNY forecast: China renminbi to surge as death cross forms
    • USD/CAD forecast as Canada prepares for Trump 50% steel tariffs
    • About us
    • Contacts
    • Privacy Policy
    • Terms & Conditions
    Golden Financier
    • Investing
    • Stock
    • Latest News
    • Editor’s Pick
    • Economy
    • Latest News

    UK GDP shrinks: what it means for the economy and new government

    • December 13, 2024
    • admin

    The UK economy has unexpectedly contracted for the second consecutive month in October, a concerning development that highlights the economic challenges faced by the new Labour government led by Prime Minister Keir Starmer.

    The latest figures from the Office for National Statistics (ONS) reveal a 0.1% decrease in Gross Domestic Product (GDP), following a similar decline the month before.

    This downturn has defied economists’ expectations of a 0.1% gain, sending a ripple of concern through the markets and causing the pound to weaken.

    This is particularly unsettling as it suggests a stalling of economic progress as the new government navigates the complex landscape.

    Labour’s economic agenda faces early headwinds

    The October contraction marks a difficult start for Labour, with the economy only showing growth in one of the four months since their landslide victory on July 4.

    This shaky beginning presents a significant challenge to the party’s ambitious economic goals.

    While Labour has pledged to improve living standards and achieve the highest sustained growth among G-7 nations, economists view this promise with skepticism given the current economic climate.

    The latest data shows that the service sector, a major economic driver, remained flat for the second consecutive month, while both manufacturing and construction output declined, pointing to widespread weakness in various sectors.

    Cooling job market and cost-of-living pressures

    The new Labour administration is grappling with a multitude of economic headwinds.

    The jobs market is cooling, mortgage and energy costs continue to rise, and businesses are considering passing on the impact of a substantial payroll-tax increase to consumers, possibly by raising prices or cutting jobs.

    A recent survey also revealed that consumer confidence remains low in December.

    The economy has stagnated since the election, adding to the pressure on the new government.

    Furthermore, the potential for global trade disruptions stemming from a possible return of Donald Trump to the White House presents an additional challenge that could further weaken the global economy.

    Consumer spending declines amidst budgetary fears

    A significant factor contributing to the economic downturn was a notable decline in consumer-facing services, which saw a 0.6% drop in output.

    The leisure sector was particularly affected, with pubs and restaurants experiencing a 2% decline, indicating that households have likely tightened their spending in anticipation of a potential squeeze from the budget.

    Despite the bulk of the £40 billion ($50.6 billion) tax hikes eventually being placed on businesses rather than consumers, the initial anxiety seemed to have curbed spending in October.

    Government acknowledges disappointment, pledges growth

    Chancellor Rachel Reeves acknowledged the disappointing figures in a statement, affirming the government’s resolve to “deliver economic growth as higher growth means increased living standards for everyone.”

    The sharp slowdown in the economy since Starmer assumed office, evidenced by a mere 0.1% expansion in the third quarter after a remarkable 1.2% surge in the first half, raises concerns about the fourth quarter as a whole.

    While current forecasts suggest growth of 0.3% to 0.4%, to continue over the next two years, the October contraction will raise questions over these predictions.

    The post UK GDP shrinks: what it means for the economy and new government appeared first on Invezz


    admin

    Previous Article
    • Investing

    TSX Composite index rallied in 2024: here are the top constituents

    • December 13, 2024
    • admin
    View Post
    Next Article
    • Latest News

    Global markets wobble as China’s plans fall flat, Fed rate cut looms

    • December 13, 2024
    • admin
    View Post

      Become a VIP member by signing up for our newsletter. Enjoy exclusive content, early access to sales, and special offers just for you! As a VIP, you'll receive personalized updates, loyalty rewards, and invitations to private events. Elevate your experience and join our exclusive community today!


      By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.
      Popular Topics
      • UK’s digital banks face divergent fortunes: Starling stumbles, Monzo and Revolut soars
      • Brent crude oil price forecast after the OPEC+ supply cut
      • Adobe stock price is cheap: is it a good buy?
      • USD/CNY forecast: China renminbi to surge as death cross forms
      • USD/CAD forecast as Canada prepares for Trump 50% steel tariffs

      Input your search keywords and press Enter.