UK economy slows in third quarter, dealing a blow to Labour government

Britain’s economy grew less than expected in the third quarter, official data showed Friday, dealing a blow to the Labour government that has set its sights on growth expansion.

Gross domestic product grew by 0.1 percent in the July-September period, a slowdown compared to 0.5 percent growth in the second quarter, the Office for National Statistics said in a statement.

The data covers the period of the Labour government’s first few months in office in the lead-up to its highly anticipated maiden budget at the end of October.

“Improving economic growth is at the heart of everything I am seeking to achieve, which is why I am not satisfied with these numbers,” finance minister Rachel Reeves said Friday in reaction to the latest gross domestic product figures. “At my budget, I took the difficult choices to fix the foundations and stabilise our public finances,” she added.

The Labour government’s first budget included major tax hikes and increased borrowing to meet Prime Minister Keir Starmer’s mission of firing up the economy, focusing on long-term growth over short-term wins. It was the first Labour budget in nearly 15 years, after the party won a landslide election in July, ending years of Conservative rule.