Shadow chancellor Mel Stride said: “This fall in growth shows the stark impact of the chancellor’s decisions and continually talking down the economy.”
KPMG’s chief economist Yael Selfin said that activity was “held back by uncertainty ahead of the Budget on 30 October” as businesses and consumers held back on spending.
But some industries, such as real estate, law firms and accountancy, brought forward work before Reeves announced the Budget, the ONS said.
Separately, a survey measuring consumer confidence in December found people were a little more positive about their personal finances for the year ahead.
But the findings from market research firm GfK found that “views on the economy are unchanged from November which suggests people don’t know where we are going”.
“In a nutshell, it’s the continuing uncharitable view on the UK’s general economic situation that’s suppressing consumer confidence,” said Neil Bellamy, consumer insights director at NIQ GfK.
Shortly after becoming prime minister in July, Sir Keir Starmer warned that the Budget would be “painful” following 14 years of Tory government.
He later denied that he was talking down the economy.
The economy has grown just once over the past five months, ONS figures show.
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