UK economy flatlines in third quarter amid high interest rates

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The UK economy flatlined between July and September, compared with the previous three months, as the impact of high interest rates and inflation weighed on consumers and businesses.

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10 Nov 2023

Zero growth in gross domestic product in the third quarter followed 0.2% growth in the second quarter, the Office for National Statistics said.

A slowdown in the property sector after a slump in house sales dragged down the services sector, while the transport sector also suffered a downturn, indicating that firms cut back on shipping goods across the country.

Most business surveys have shown falls in output and employment in recent months in reaction to falling consumer demand in the UK and elsewhere in Europe.

An increase in interest rates has dampened consumer spending, with many retailers signalling that they are prepared for a difficult festive period.

Inflation was unchanged at 6.7% in September to leave many workers who received pay rises below the consumer prices index suffering a loss of spending power.

Suren Thiru, the economics director at the Institute