The UK economy stagnated in the third quarter of 2024 (July-September), according to data published this morning by the Office for National Statistics (ONS).
Estimates from the body show real gross domestic product (GDP) per head fell by 0.2%, 0.2% lower when compared with the same period last year.
The report from ONS highlighted that UK real GDP was estimated to have shown no growth, revised down from an earlier estimated increase of 0.1%.
According to the data, there was no growth in the service sector in the third quarter. Early estimates show that 9 out of 20 subsectors grew, revised down from 11 in the first estimate.
Non-consumer-facing services showed no growth in quarter 3, while consumer-facing services increased by 0.1%, down from the original estimate of 0.5%.
According to the data, the largest contributor to growth was the wholesale and retail trade: repair of motor vehicles and motorcycles subsector, which increased by 0.5%.
ONS reported that the largest negative contributor to growth was financial and insurance activities, which fell by 0.6%.
The data highlighted there was a 0.7% increase in the construction industry, however this was offset by a 0.4% fall in production.
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According to the ONS, the production sector was estimated to have fallen by 0.4% in quarter 3, revised from the first estimate of 0.2%. When compared with the same quarter last year, production output is estimated to have fallen by 2.3%.
The ONS reported that the fall in production was mainly driven by a 2% decline in electricity, gas, steam, and air conditioning supply and a fall of 0.1% in water supply, sewerage, waste management, and remediation activities.
It also reported 0.1% falls in manufacturing and 0.3% in mining and quarrying.
Household expenditure showed an increase of 0.5% in quarter 3, which the ONS attributed to an increase in spending in the housing, clothing and footwear, restaurant and hotels categories.
However, the ONS estimated there was no growth in real household disposable income in quarter 3 despite recording a growth of 1.4% in quarter 2.
Furthermore, the household saving ratio is estimated at 10.1%, down from 10.3% recorded in quarter 2.
The data also showed employee compensation had increased by 0.7% in quarter 3 due to an increase of 0.6% in wages and salaries and a 1.3% increase in employer’s social contributions.
