UK Economy Grows 0.1%, Avoids Recession Amid Tax Concerns

The UK economy narrowly avoided recession, growing by 0.1% in the last quarter of 2024, following a stagnant third quarter. This modest growth was driven primarily by the services sector and increased government spending, but concerns remain about the underlying economic health, particularly with a 3.2% decline in business investment. While overall GDP increased by 0.9% for the year, GDP per capita fell by 0.1%, indicating that individual living standards are not improving. Chancellor Rachel Reeves faces criticism for her tax hikes and the potential consequences of upcoming employer National Insurance increases, which may lead to job cuts and hinder future growth. The economic outlook is cautious, with many warning of deeper issues beneath the surface, such as declines in retail and manufacturing. As the government grapples with fiscal challenges, the path forward remains uncertain, with tough choices on taxes and spending looming.