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What's gone wrong with the economy?

Journalist: Jon King, Daily Express Online

ended 13. December 2023

The size of the UK economy contracted in October as the manufacturing and construction sectors were hit by poor weather.

GDP is thought to have fallen 0.3% during the month, down from 0.2% growth in September, according to the Office for National Statistics.

The Daily Express is looking for some strong reactions to the latest growth figures expressed in two or three paragraphs.

Who or what do you think is to blame for the contraction? What needs to be done to turn things around? How optimistic do you feel about the future? 

11 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Further proof, if needed, we have a zombie Prime Minister and a zombie government who are out of ideas. Stubbornly sticking to idealistic policy, like Rwanda, when the cost of living bites and the economy suffers. The government have got its priorities all wrong, and they don’t match the top issues people care about. The sooner there is a general election, the better for business, households and the wider electorate.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
The contraction of the economy is due to the prolonged cost of living and the failure of the government in their response to inflation. The Bank of England raised the base rate continuously and that was not justified as the cause of this inflation was not the usual excess of disposable income and higher spending. By continually using the wrong tools, more pain was inflicted on the population from increased mortgage rates and rents, the full impact of which is still to be felt by many. With businesses also fighting increasing costs, taxes and wages, the economic slowdown is far from unexpected. The only positive is that this latest data should see the base rate reduced sooner rather than later to provide some respite and kick-start the economy.
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Darryl Dhoffer
Founder at The Mortgage Geezer
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Wes Wilkes
CEO at IronMarket Wealth
It looks like the UK is finally waking up to bad news being bad news. This contracting growth is more typical of where the UK really is outside of the Covid-induced haze of growth. We need policy and outlook that accepts the UK is not the grand old lady anymore. Disruptive and innovative leadership is what we need to break the dreary outlook.
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Craig Fish
Director at Lodestone Mortgages
It's clear who is to blame, and the UK public can't wait for the general election. The policy decisions that have come from this government have been appalling. Rates were kept too low for too long, and whilst the government arent directly responsible for rate setting, they do have a voice. When it came to increasing rates, they simply went too far and didn't give the changes time to take effect. The result is that we are now headed for a recession unless they do something swiftly and decisively. I suspect though that they are still asleep at the wheel with a hangover that they seem to have been suffering from following all the lockdown parties held at no 10.
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John Lamerton
Small Business Author at Big Ideas... for Small Businesses
I fear the worst is yet to come, particularly for small businesses. Small business owners are already battening down the hatches with a 2024 recession looking as likely as a coin toss. Investment decisions have been postponed, recruitment has been cancelled, and confidence is at a 15-year low.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
The UK economy is currently on a plateau and whilst it's easy to look at that as a very bad thing, we should also appreciate that it's not really contracting overall either, when we look at the past few months we've had small amounts of growth, now small contractions, overall it's a zero sum game. Off the back of a turbulent few years; some very good and some very bad depending on your sector, there was always going to be a point of calm as things balanced out. The bigger question needs to be; which way does it tip from here? Upward into a period of growth, or downward into a period of contraction. With us entering what is most likely going to be an election year, it's not an easy call to make, as many markets will want to see the results of the general election and the political priorities of the new administration (if indeed we have one) before we see which direction they take.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
The UK simply doesn't have the resilience it once had to withstand the financial battering global economies have faced. Is it time to rethink some policies for controlling inflation while simultaneously stimulating growth? The general public is all out of optimism and patience with over-budget Government agendas that don't directly address day-to-day domestic priorities.
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Danielle McKenny
Owner at Gaea's Garden organic skincare
The problem with the "economy" is that they keep changing the measuring sticks and the equations they use to measure the "economy", creating false pictures of "growth" and "health" when the reality is not even remotely true. The true measurement of the "economy" is how much money the general public has in their pocket, not whatever lies the corporations and governments give out to try and lull the public into thinking everything is "fine". When the people have to make decisions between putting food on the table or paying rent, when the people are scratching pennies together to try and buy their children Christmas presents.... none of the lies of the corporations or governments matter. When the people have no money to spend on ANYTHING relevant, then the "economy" is dead, regardless of what equations the think tanks come up with to sell the lie that everything is just fine. Christmas spending (or the lack thereof), will tell the truth of the matter very clearly.
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David Robinson
Co-Founder at Wildcat Law
Winter is coming! Businesses across the country are feeling the triple bite of high taxation, high wages and a decline in demand. SME's as ever are the ones really taking the hit as these three are also being combined with higher borrowing costs.
Unless we see a stimulus package in the new year the best we can hope for economically is stagnation, but do not be surprised if we start to see a wave of otherwise healthy businesses folding.
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Graham Loosley
Partner at Mercian Accountants Ltd
The services sector's decline post-pandemic highlights the absence of sustained growth in the country, primarily due to the cost of living crisis and high borrowing costs affecting consumer budgets and business activity.

This month's GDP might witness a slight recovery from November's figures, spurred by the holiday rush. As such, any growth prospect will remain subdued as it will be dampened by the interest rates still left on hold by the BoE.

One solution involves the government offering tax incentives across various sectors, including manufacturing, life sciences, tech, transportation, and ESG, to boost private investment. PM Sunak should also implement measures for inflation relief, focusing on food security and energy. Finally, he should address the worker shortage caused by Brexit, which exacerbates supply chain issues and local price rises, by allowing EU laborers to fill these gaps for remedial action.