Britons need to get used to hearing the words “no growth” with the economy in trouble and no credible plan to save it, a business owner has said.
The economy eased in the third quarter of this year with the reporting of the Office for National Statistics GDP growth in the July to September period was zero compared to the previous quarter.
All sectors, including manufacturing and construction, showed broadly the same dominant picture, although the quarterly result was slightly ahead of analysts’ expectations of a slight decline in output, despite the damning headline.
News of the economic stagnation has sparked criticism of the Government, with small business owners coming forward to voice their anger.
Riz Malik, Founder and Director of R3 Mortgages, said: “Unfortunately we will have to get used to hearing the term ‘no growth’ over the next few years.
“Our economy is in trouble and there is no credible plan to save it, at least from this administration.”
The Bank of England has already warned that the UK could face zero growth until 2025, but it is likely to avoid recession.
Analysts had forecast a 0.2 percent drop for the quarter and a flat reading for September. But the ONS reported 0.2 per cent growth in the economy for September, amid a boost from the film production, health and education industries.
The ONS also revised growth in August to 0.1 per cent, from 0.2 per cent, and reported a 0.6 per cent decline for July.
Samuel Mather-Holgate, independent financial adviser at Mather and Murray Financial, said that after a summer of major doom for UK plc, it was “good” to see some growth in September, “respectable though”.
He said: “This should not be taken as evidence that (Prime Minister Rishi) Sunak and (Chancellor Jeremy) Hunt’s plans for the economy are working, as they will try to say.
“It couldn’t be further from the truth. This relentless Government has no plan to benchmark their success against and they are wandering into the abyss. Sadly, they don’t even know it.”
Mr Hunt, commenting on the figures, said high inflation the single biggest obstacle to economic growth, adding: “The best way to grow our economy sustainably right now is to stick to our plan and put inflation on its head.”
He added that the Autumn Statement on November 22 will focus on how to get the economy growing healthily again by “unlocking investment, getting people back to work and reforming our public services” to deliver the growth the country needs.
Shadow Chancellor Rachel Reeves said the figures were further evidence that the economy is not working under the Conservatives and people who are working are worse off.
Economists said after the latest figures that Britain looks set to avoid a recession despite concerns about the impact of significant interest rate hikes recently taken by the Bank of England in an attempt to beat inflation.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The economy narrowly avoided contracting in Q3, and we continue to think it can maintain this resilient performance in Q4.
“We continue to think the chances of a recession look low; we are looking for a 0.3% quarter-on-quarter increase in GDP in Q4 and we expect that pace to be broadly maintained next year.”
Rachel Hayward, Managing Director of Ask the Chameleon Ltd, said: “Costs are rising, sales are falling, and taxes are rising. You don’t have to be an economist to see the impact.”
That impact is also being felt in the charity sector as families continue to tighten their purse strings amid the cost of living crisis.
Gemma Wilkes, Fundraising Manager at cancer counseling charity We Hear You, in Frome, Somerset, said the sector faces significant challenges in the current climate.
She explained: “The economic stagnation seen between July and September is certainly being felt by many charities.
“There is a lack of funding and our supporters are under much more financial pressure, due to inflation and higher interest rates, as a result of fewer donations.”
Ms Wilkes added: “The current economic environment is bleak for small charities, which rely on grants, trusts and community fundraising to provide vital services within their communities.”
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