LONDON (XINHUA) – Latest data shows that the United Kingdom’s (UK) economic growth in the fourth quarter (Q4) of 2024 exceeded market expectations, bringing a sense of relief. However, uncertainty still clouds future economic trends.
The Office for National Statistics reported that the country’s gross domestic product (GDP) grew by 0.1 per cent quarter-on-quarter in Q4 2024, while December saw a 0.4 per cent increase in economic activity.
This result significantly surpassed market forecasts. Prior to the data release, institutions, including the Bank of England, had generally expected the UK economy to contract by 0.1 per cent in Q4. With the previous quarter showing zero growth, the UK economy seemed to be on the verge of stagnation.
For the Labour government, which has faced heavy criticism, this unexpected economic growth provides some relief. Chancellor of the Exchequer Rachel Reeves has repeatedly stressed that promoting economic growth is the government’s top priority.
However, since Labour took office in early July last year, the UK’s economic momentum has weakened. In Q3 2024, GDP remained flat, in contrast to the 0.7 per cent and 0.4 per cent growth rates in Q1 and Q2, respectively.
Reeves’ Autumn Budget, released in October, was viewed as unfavourable to economic growth. The budget increased employer national insurance contributions, raised the minimum wage and reduced energy price subsidies, resulting in business reluctance in hiring and weakened consumer confidence.
The release of the latest GDP figures brought a sense of relief to business organisations and research institutions alike.
“Confirmation that the economy grew slightly in Q4 is a small bit of relief for businesses in challenging times,” said research director at the British Chambers of Commerce Stuart Morrison.
Chief economist at the Institute of Directors Anna Leach commented that the UK’s 0.1 per cent GDP growth in Q4 was encouraging as it exceeded the Bank of England’s forecast of a 0.1 per cent contraction. This suggests that the UK economy grew by 0.8 per cent, compared with just 0.4 per cent in 2023.
