UK Economy Grows 0.1% in Third Quarter

The UK economy saw minimal growth of 0.1% in the third quarter of 2024, down from 0.5% in the previous quarter, as uncertainty surrounding Labor's budget and anticipated tax increases dampened business confidence. Chancellor Rachel Reeves expressed dissatisfaction with the figures, acknowledging that the rise in National Insurance Contributions could restrain hiring and investment. Meanwhile, the housing market experienced a 1.4% decline in average property prices due to similar budget concerns, though optimism for a stronger market in 2025 remains. In the U.S., strong economic data is leading to a recalibration of expectations regarding interest rate cuts by the Federal Reserve, with discussions ongoing about the pace and extent of potential reductions. As the Bank of England's Monetary Policy Committee prepares for its December meeting, economists suggest that the UK’s sluggish growth could prompt a cut in the base rate. The current economic landscape poses significant questions for future fiscal policy and business investment in both nations.