By Thabo Mosia
The United Kingdom’s economic growth has slowed to a near standstill, with the Office for National Statistics (ONS) reporting a mere 0.1% increase in Gross Domestic Product (GDP) for the third quarter of 2024. This tepid growth follows a 0.5% expansion in the previous quarter, highlighting a significant deceleration in economic momentum. 
Service Sector Slump and Economic Indicators
The service sector, which constitutes approximately 80% of the UK’s economy, exhibited minimal growth of 0.1% during this period. This stagnation is a primary contributor to the overall economic slowdown. Additionally, GDP per capita declined by 0.1%, marking the first decrease in six months.
In September 2024, the economy contracted by 0.1%, further underscoring the challenges faced by the UK. This contraction aligns with other indicators suggesting a loss of economic momentum leading up to the Budget announcement. 
Bank of England’s Perspective on Brexit and Trade Relations
Andrew Bailey, Governor of the Bank of England, has expressed concerns regarding the economic impact of Brexit. He stated that Brexit has weakened the UK’s trade and productivity, emphasizing the necessity to rebuild relations with the European Union (EU) to mitigate these adverse effects. Bailey highlighted the importance of maintaining open trade policies and strengthening ties with the EU amidst global economic fragmentation. 
Bailey’s remarks come at a time when the UK is facing potential trade challenges, including the prospect of increased tariffs from the United States under President Donald Trump’s administration. These developments add to the uncertainty surrounding the UK’s economic outlook.
Government Response and Economic Outlook
Chancellor Rachel Reeves has expressed dissatisfaction with the sluggish economic growth, acknowledging that the 0.1% GDP increase falls short of expectations. She emphasized the government’s commitment to implementing measures aimed at stimulating economic activity and addressing structural challenges. 
Economists have noted that the UK’s economic performance lags behind other G7 nations, with the country falling behind the US in growth rankings. Post-Brexit trade challenges continue to hinder economic performance, despite efforts to strengthen EU relations. 
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