Welcome to Extreme Investor Network, where we bring you unique insights and analysis on the latest economic trends and events. Today, we dive into the recent news that the U.K. economy grew less than expected in the third quarter of the year, showing only marginal growth following a rebound at the start of the year.
According to initial figures, Gross domestic product in the U.K. came in at 0.1% in the three months to September, below the 0.2% growth expected by economists. The dominant services sector also grew just 0.1% on the quarter, with construction rising by 0.8% and production slipping 0.2%.
This news comes after inflation in the U.K. fell sharply to 1.7% in September, below the Bank of England’s 2% target. The central bank responded by cutting rates by 25 basis points, bringing its key rate to 4.75%. The Bank of England expects the Labour Government’s tax-raising budget to boost GDP by 0.75 percentage points in a year’s time.
Finance Minister Rachel Reeves expressed dissatisfaction with the numbers, emphasizing the need for investment and reform to drive growth and create jobs. However, a rate cut at the BOE’s next meeting in December seems unlikely, given inflation risks and global economic headwinds.
The recent U.S. election has also introduced uncertainty about the global economic impact of another term from President-elect Donald Trump. While Trump’s proposed tariffs could have inflationary effects and impact the European economy, some analysts believe they could present opportunities for the British economy.
Bank of England Governor Andrew Bailey hinted at risks around global fragmentation in light of Trump’s tariff agenda. The British pound saw slight movements against the U.S. dollar and euro following the GDP release.
Stay tuned to Extreme Investor Network for more in-depth analysis and expert insights into the dynamic world of economics. Join us as we navigate through these challenges and opportunities to help you make informed investment decisions in today’s ever-changing market landscape.