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"Rachel Reeves will be relieved" as UK GDP grows by 0.1% in Q4

ended 13. February 2025

GDP is estimated to have increased by 0.1% in Quarter 4 (Oct to Dec) 2024, following unrevised no growth in the previous quarter, according to official data published this morning. Meanwhile, GDP is estimated to have grown by 0.4% in December 2024 because of growth in services and production. Newspage asked economists and financial experts for their views, which will appear below until 08:30.

7 responses from the Newspage community

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Gabriel McKeown
Political & Economics Writer at Sad Rabbit - Substack Newsletter
This is not the time for celebrations, as despite technically showing signs of growth, the latest GDP figures should act as a sobering reminder of the challenges ahead. For many, this will feel like a bucket of cold water on the embers of economic optimism, with the road to recovery becoming longer than previously hoped. Sterling will likely continue to face downward pressure as investors reassess the UK's economic trajectory and increased rate cut expectations. Additionally, UK-centric stocks, particularly in the financial and retail sectors, may experience heightened volatility. However, there is hope that this may encourage policymakers to recalibrate current positioning to foster growth and reignite economic confidence.
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Scott Gallacher
Director at Rowley Turton
Rachel Reeves will be relieved the UK avoided a recession, but the figures highlight a stagnating economy with little sign of her growth agenda taking hold. December’s 0.4% rebound, driven by services and production, offers a glimmer of hope. The Bank of England is likely to hold rates steady, balancing sluggish growth with inflation risks. Markets may welcome signs of recovery, lifting equities, while the Pound could strengthen if December’s momentum continues. However, UK-based investors should be cautious of home bias in their portfolios given the underlying economic challenges.
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David Belle
Founder and Trader at Fink Money
The elephant in the room for Labour is the continual contraction in GDP per capita. Nothing else matters barring this figure, because it implies there are too many unproductive people in the country, with this being in the face of the highest migration ever, and highest amount of sickness benefit ever too. We must also be cognizant that production was down 0.8% while retail sales were also weak for December. Therefore there is a trade on the revised figures in a few weeks time, which I will bet will suggest we did in fact enter recession. It's all very sombre and bleak viewing.
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Riz Malik
Independent Financial Adviser at R3 Wealth
UK PLC got a D on its report card rather than a F. Let’s break out the champagne. The economy is being mismanaged and we are all suffering as a result.
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Tony Redondo
Founder at Cosmos Currency Exchange
With Valentine’s Day tomorrow, let’s be generous and show some love to our beleaguered Chancellor. This morning’s data showing a 0.4% rise in December, driven by growth in services and production is better than expected, and shows some resilience in the economy. For the Bank of England, this modest performance will encourage them to hold interest rates steady in their attempt to balance inflation control with economic fragility. The Pound may see limited upside with support from the expectation that another imminent rate cut has lessened. Equity markets will remain cautious and more focused on the impact of Trump’s trade tariff regime. This morning’s data, although welcome, will do little to lift the doom and gloom from the post-budget economy.
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Prem Raja
Head of Trading Floor at Currencies 4 You
UK GDP numbers came out slightly better than expected today, showing a 0.4% rise in December, which has given the Pound a sigh of relief, currently trading at 1.25 against the Dollar, the highest over the last week. The Bank of England will still stick with plans to hold rates where they are as this shows no signs to cut further just yet, the current Pound strength might be limited but is a welcome surprise today.
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Sam Kirk
Managing Director at J-Flex Rubber Products
The only relief today will be the collective unclenching of buttocks in Government as the UK narrowly avoids recession (yet again). Whilst Labour will no doubt celebrate this as a win, the Bank of England's recent revised growth forecast should serve as a reminder that there is still plenty of work to do and the road ahead still contains plenty of potholes.