UK economy flatlined in third quarter

The UK economy showed zero growth between July and September 2023 compared with the previous three months, according to new figures from the Office for National Statistics (ONS).

This followed a 0.2% increase in gross domestic product (GDP) between April and June.

A fall of 0.1% in the services sector offset a 0.1% increase in construction output and broadly flat output in the production sector.

Although the latest figures suggest the economy is stagnating, it does mean that the UK will avoid a recession this year — defined as two consecutive quarters of falling GDP.

Economists had predicted that the third quarter would show a slight decline. The quarterly performance was boosted by a stronger September, the ONS said.

“In the month of September the economy grew slightly, with increases in film production, health and education,” explained Darren Morgan, ONS director of economic statistics. “This growth was partially offset by falls in retail and computer programming.”

Compared with the third quarter a year ago, GDP increased by 0.6%.

The chances of a recession in 2024 “look low” according to Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

“We look for a 0.3% quarter-on-quarter increase in GDP in Q4 and expect that pace to be broadly maintained next year,” he added.