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How much of a sting in the tail are today's GDP figures?

Journalist: Jon King, Daily Express Online

ended 22. December 2023

The UK economy shrank between July and September, raising the risk of the country dipping into a recession, according to revised official figures.

Gross domestic product (GDP) fell by a revised 0.1% against the zero growth initially estimated, the Office for National Statistics (ONS) said.

It also flatlined during the second quarter of the year, after prior estimates showed 0.2% growth, painting a bleaker picture for the economy.

The Daily Express is looking for strong views on today's GDP figures in 2-3 paragraphs.

10 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
These figures show that both monetary policy and fiscal policy haven’t worked. Despite all the indicators showing a weakening economy, the central bank indicates it will keep rates higher for longer and the government hold its tax burden at a 75 year high. The new year is set to bring us a new government, with the new government that could bring us a new bank governor. If they are serious, a new mandate for the central bank so they aren’t tripping over their own feet in the future.
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Darryl Dhoffer
Founder at The Mortgage Geezer
These recent revisions to UK GDP growth raise the spectre of recession and are very worrying. They will put Threadneedle Street under significant scrutiny. Public and market confidence in the Bank of England's ability to manage the economy is now at an all-time low. The calls for the Bank of England to cut interest rates to stimulate growth are bellowing, but they're falling on deaf ears. Raising rates further would be madness, and cuts are needed sooner rather than later.
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Ken James
Director at Contractor Mortgage Services
The UK economy is staggering around like drunkards from a Christmas party, Rishi Sunak made it a Primary goal to grow the economy in his 5 key pledges, this drives deeper the sentiment that maybe he and his party of doom are not up for the task.
His right-hand man Jeremy Hunt is trying his best to save face for the party but you cannot escape the fact that if we have a run of contraction you are in a recession, this is the last thing they need as we head into an election year, this could send out a message to voters that a changing of the guards is right and Labour will be rubbing their hands with Glee at the mess the economy is in under Tory rule. From the disappointing ONS figures we may see Rate cuts coming earlier than expected as the MPC tries to stave off the recession and breathe new life back into the economy and Hunt may look at the possibility of Tax cuts, could we see this reaction coming early in 2024, or will they sit back and wait to hit rock bottom first.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Such bad news for the economy could translate into good news for borrowers. These revised GDP figures show the strained breaths of an economy being tightly strangled by the Bank of England over the past 12 months, bringing many businesses to their knees. That's especially the case in the retail sector. This week's inflation data, and the fact the next base rate review is not until February, means the January inflation data will be critical in where the economy and mortgage rates go next. In the meantime, there is still some quiet confidence we have turned the corner on the rate front. The Bank of England is once again at risk of being seriously behind the curve.
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Wes Wilkes
CEO at IronMarket Wealth
Today's GDP numbers are not a surprise. The COVID-fueled inflationary excesses are now falling back as the tide goes out and we are left with the site of a UK economy swimming naked.
Whilst the rate cut versus inflation story is relevant and important, what we now need to see if real work from our policy makers and politicians if we are to see a resurgent UK economy anytime soon.
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Kundan Bhaduri
Property Developer and Portfolio Landlord at The Kushman Group
Who cares about a technical recession? So even if GDP falls in the fourth quarter estimates between October and December (which will be released in January 2024), the fact still remains that we have been in an anemic growth period for the past 18 months - recession or no recession. That is what really affects the common man. Higher prices, lower prospects of finding another job and deterioration in the quality of life as a result of cuts to public services and reduced government spending.

While inflation has fallen back in recent months, Threadneedle Street has already warned that borrowing costs will need to remain high for a prolonged period to ensure inflation falls back to the 2% target set by the government. We are likely to see a sustained period of pain for the average consumer throughout 2024.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
Keeping up with soaring costs of essentials like mortgage payments, utilities, food and fuel has left little in the bank for anything else for many households. It’s unlikely we’ll see much change into 2024.

It’s too soon to get into a flap about whether we are headed into a recession. A key priority needs to be getting back consumer confidence and spending. Given the current monetary policy, that seems a long way off.
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Luke Thompson
Director at PAB Wealth Management
The revising downwards or upwards of figures often happens so we shouldn't see this as unexpected.

But these figures coupled with the high cost of living over the past eighteen months really are an indictment on the management of the economy by the Bank of England and the government. Growth has been anaemic, the cost of everything has exploded and debt has spiralled since 2020.

The talk may be of a shallow recession but to me that is actually more concerning bearing in mind just how poor GDP growth has been for the past 13 years. The country has a real productivity and growth problem at the moment and poor management of the economy by those in charge has been a massive factor in this.
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John Lamerton
Small Business Author at Big Ideas... for Small Businesses
These GDP figures confirm what small business owners have known all year - consumer confidence is at rock bottom, budgets are being squeezed, and the livelihoods of tens of thousands of small businesses hang by a thread.
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Graham Loosley
Partner at Mercian Accountants Ltd
UK's post-pandemic boom has fizzled in the services sector. Tight purse strings from the cost-of-living crunch and rising borrowing costs are choking growth. December's GDP might see a festive blip, but holiday cheer won't mask reality: subdued prospects dampened by the BoE's interest rate stalemate.

To kickstart 2024, we need Sunak to ditch one-track incentives. Spread the tax incentives to life sciences, tech, transport and ESG sectors. We need more private investment too. Meanwhile, tackle the inflation fire: ease food and energy burdens. Finally, Brexit's ghost still haunts supply chains. It's time to welcome EU workers back to fill the gaps. Otherwise, the UK risks another year of economic sluggishness – with little to celebrate beyond a few sparkly fireworks.