Britain’s Gross Domestic Product (GDP) has fallen after months of stagnating, dropping 0.2 percent in the three months to November 2023.
It comes after figures released in November 2023 recorded zero growth in the three months to September but saw a 0.2 percent surge in the services sector.
But critics of the Conservative Party’s stewardship of the UK economy who are blaming Brexit for the lack of growth were roundly mocked in December.
Those putting the blame for the lack of growth in Britain’s GDP at the feet of those who voted to leave the European Union were left to contend with the fact that Germany and France were faring worse.
For although the UK economy was stagnant, the two bloc powerhouse economies actually recorded contractions, leading economist Julian Jessop to mock bitter Remainers.
Mr Jessop said: “Monthly GDP can be volatile but the 0.3 percent m/m fall in October is disappointing, with services, manufacturing and construction all down. Big picture – UK economy is flatlining.
“Ps. I see the usual suspects are already crying ‘Brexit!’ The reality is that all G7 economies are struggling (bar the US). Indeed, GDP contracted in Q3 in France, Germany, Canada and Japan.”
According to data released by the Office of National Statistics (ONS), services showed no growth, production output fell by 1.5 percent and construction fell by 0.6 percent in the three months to November 2023.
Meanwhile, output in services reportedly grew by 0.4 percent in November 2023 and was the largest contributing sector to the growth in monthly GDP. Production output grew by 0.3 percent on the month, while construction fell by 0.2 percent.
But while real GDP is estimated to have fallen by 0.2 percent in the three months to November, monthly GDP is estimated to have grown by 0.3 percent, following an unrevised fall of 0.3 percent in October 2023.
Jeremy Batstone-Carr, European strategist at Raymond James said this marginal monthly growth represents a timid increase in the midst of weak economic activity.
Mr Batstone-Carr said: “Today’s GDP data confirms the flatlining trend we witnessed over much of 2023 while breaking a streak of contractions with a timid increase of 0.3 percent from the previous month.
“This is the result of a mild rebound in service sector activity and retail sales, as well as a boost in recreational activity due to the timing of the school half-term holidays. Manufacturing output and industrial production also showed a partial recovery from October’s stark figures. Electricity and gas production was boosted by November’s colder weather, which is likely to continue over the coming chilly months.”
However, he noted: “Despite a slight uptick, today’s data should not detract from the reality that the economy remains weak, with a period of stagnation that has now stretched over more than a year.
“The Bank of England is well aware of this subdued performance, but its focus remains on eliminating lingering inflationary pressures. If the Bank continues to view economic weakness as an unfortunate requirement in order to limit inflation, then it will likely be in no rush to lower interest rates any time soon. Given the lagged impact of earlier rate hikes on the wider economy, it is probable that this weak performance will continue for some time to come.”
Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales (ICAEW), said: “This underwhelming recovery in GDP points to an economy struggling to gain momentum as high borrowing costs and anaemic demand continue to hinder economic activity.
“November’s rebound may have been insufficient to prevent a small technical recession at the end of 2023, with the cost-of-living squeeze and high borrowing costs likely to have constrained output in December.
“The UK is facing a notably difficult 2024 with the lagged impact of previous interest rate rises, weaker consumer demand and moderately higher unemployment likely to stifle economic activity, despite a boost from lower inflation.
“This lacklustre GDP outturn means that interest rates will remain on hold next month. With the UK teetering on the brink of recession and inflation slowing, the case for loosening policy sooner rather than later is growing.”
