Flatlining growth rate puts UK on brink of recession

Britain's economy flatlined in the first three months under the new Labour government, leaving the country on the verge of recession and forcing Rachel Reeves to once again defend her tax-raising Budget.

- ALBERT TOTH, MILLIE COOKE, ARCHIE MITCHELL

Growth from July to September was revised down from 0.1 per cent to zero by the Office for National Statistics (ONS). Living standards also fell.

With the economy at risk of contracting in the next quarter, it leaves the UK at close risk of two consecutive periods of negative growth – a scenario that meets the definition of a recession. It is a fresh blow for Sir Keir Starmer’s government, which has put economic growth and raising living standards for everyone at the heart of its mission.

It came a day after the Confederation of British Industry (CBI) warned that the jittery economy was heading for the “worst of all worlds” in 2025, and as early figures pointed to a bleak festive period for high streets – with footfall 11.4 per cent down on last year over the final full week before Christmas, according to Rendle Intelligence and Insights.

Meanwhile, Britain’s struggling pubs and restaurants have pleaded with the chancellor to rethink her planned increase to employers’ national insurance contributions (NICs).

Kate Nicholls, chief executive of UKHospitality, said yesterday that the revised growth figures “confirm what we already suspected – that the economy is in a fragile place and in dire need of growth”. She added: “With business confidence already plummeting and a third of hospitality businesses operating at or below break-even, the planned changes to employer national insurance contributions will make generating economic growth even more difficult.”