Despite a welcome return to growth, disappointing GDP data raises fears of stagnation 16 January 2025 The UK economy has returned to the weak growth that has characterised the past 15 years, as the mini-recession in the second half of 2023, and subsequent recovery in early 2024, has petered out, the Resolution Foundation said today. The economy grew by 0.1 per cent in November – with service sectors such as hotels, retail, ICT and food all growing, while production shrank for a third consecutive month. The small rise follows a fall of 0.1 per cent in October. A little over a year ago, the UK was still in the midst of a mini recession, with the economy shrinking across the second half of 2023. However, the economy subsequently bounced back – growing by 1 per cent between January and March 2024 – with Britain briefly becoming the fastest growing economy in the G7. However, the UK’s economic record since then has been disappointing. Growth in November was lower than expected (0.2 per cent forecast) and meant that the economy contracted in the eight months of data since March last year. The UK will need to beat the forecasts and increase the current pace of growth in 2025 and beyond if the government is to meet its economic milestones and raise living standards, says the Foundation. Simon Pittaway, Senior Economist at the Resolution Foundation, said: “In recent years the UK has been a growth rollercoaster, with a recession in late 2023 followed by a bounce back in early 2024. But its longer-term record is one of economic stagnation, and that is where Britain risks returning to. “The paltry GDP growth late last year reinforces the need for the government’s economic plans to start bearing fruit.”
