Proactive Investors - UK gross domestic product (GDP) grew slower than expected in the three months to September as businesses braced for the Autumn Budget.
Office for National Statistics figures on Friday showed the UK economy expanded by 0.1% in the third quarter, against the 0.5% growth seen over the second and below the 0.2% expected by analysts.
This came as production output fell by 0.2% during the quarter, while the service and construction sectors grew by 0.1% and 0.8% respectively.
Confederation of British Industry economist Ben Jones noted “uncertainty ahead of the Budget probably played a big part” as decision-making slowed.
Though the economy was still expected to return “to a path of modest growth,” he added downside risks had increased.
“The Budget has set off warning lights for business,” Jones continued, “the hike in national insurance contributions alongside other increases to employers’ cost base will add to the burden on business.
“It is expected to trigger a more cautious approach to pay, hiring and investment as companies work through what it means for their own budgets.”
“The extent of the slowdown is a bit more pronounced than expected,” Abrdn chief economist Luke Bartholomew said.
“With activity growth in September being reported as particularly weak, it is plausible that some of the slowing is the result of elevated uncertainty at that time, as firms and households speculated about possible tax changes ahead of the Budget.”