The economy shrank 0.1% in September, shock figures revealed on Friday in a blow to the Chancellor Rachel Reeves.

Gross Domestic Product (GDP) rose by 0.1% – slightly below City expectations – between July and September, according to the Office for National Statistics.

September’s negative growth was partly blamed on lower output, although growth was “modded” in most sectors.

Friday’s GDP figures were for the first three months since Labor came to power after the July 4 general election.

It was bad news for Ms Reeves, who is already under fire over her budget, including an increase in national insurance for employers, including hospices, charities and GPs.

Responding to the figures, the chancellor said: “Improving economic growth is at the heart of everything I am trying to achieve, which is why I am not happy with these figures.

“In my budget, I have made the tough choices to fix the foundations and stabilize our public finances.

“Now we will deliver growth through investment and reform to create more jobs and more money in people’s pockets, get the NHS back on its feet, rebuild Britain and secure our borders in a decade of national renewal.”

But the shadow chancellor, Mel Stride, told Times Radio: “What the Labor government did over the summer was to justify what it planned to do all along, which was to raise taxes substantially without telling anyone in advance that it was their mission to talk down. the British economy.”

Liberal Democrat Treasury spokeswoman Daisy Cooper said: “After a Budget that promises to deliver little by way of growth and an unfair tax on small businesses, we need to see a real growth plan from the government.”

Britain’s economic growth of 0.1% from the third quarter of 2024 comes after growth of 0.5% between April and June, the Office for National Statistics (ONS) said.

The latest quarterly estimate was behind economists’ forecasts of 0.2 percent.

Liz McKeown, ONS director of economic statistics, said: “The economy grew slightly in the last quarter as the recent slowdown in growth continued.

“Retail and new construction work performed well, partially offset by declines in telecommunications and wholesale. Overall, growth was subdued in most industries in the last quarter.

“In September, the economy shrank a bit. Services saw no growth, with a notable increase in car sales offset by a slow month for IT companies.

“Production was down overall as a result of manufacturing, although there was an increase in oil and gas extraction.”

However, some economists remained doubtful whether the Bank of England’s Monetary Policy Committee would further cut interest rates in December from 4.75%.

Suren Thiru, chief economist at accountancy institute ICAEW Economics, said: “Despite these poor numbers, a policy easing in December looks unlikely as rate-setters are likely to be sufficiently concerned about inflationary risks in the budget and global growth headwinds to resist signing. consecutive interest rate cuts.”

Thursday night, Mrs. Reeves brought her first boss to Mansion House as Chancellor.

She told business leaders she plans to tear through financial red tape and create pension “mega funds” that will “fuel growth” in the economy and reward British savers.