UK economy stalls again as pre-Budget jitters put activity on hold
Commenting on this morning’s GDP figures, Julian Jessop, Economics Fellow at the free market think tank the Institute of Economic Affairs, said: “There is little to cheer in the latest GDP data. The feeble monthly growth of 0.1% in August followed a downwardly revised contraction of 0.1% in July, and means that activity has been flat over the latest two months.
“The three-month comparison did improve slightly, from 0.2% to 0.3%, but is likely to drop back again in September.
“The big picture is that the UK economy has stalled again as pre-Budget jitters have frozen activity in the private sector.
“This is confirmed by multiple surveys across the full range of businesses – including services, retail, manufacturing, construction, and the housing and labour markets.
“The chancellor must use her November statement to restore some confidence among businesses, consumers and investors. If taxes are raised, this should at least be done in ways that reduce uncertainty once and for all.
“This could be achieved by broader-based increases in the main taxes, which would raise more money in ways that are less likely to distort the economy, combined with an increase in the fiscal headroom to protect against future shocks.
“But it would clearly be much better to focus on controlling public spending and freeing the private sector to drive growth instead.”