UK Treasury Chief Unhappy with Slow Third-Quarter Economic Growth

London: Britain's Treasury chief, Rachel Reeves, expressed dissatisfaction with official data showing a slowdown in UK's economic recovery from recession in third quarter, with most sectors remaining stagnant, she said this on Friday.

Office for National Statistics reported that economy grew by just 0.1 percent from July to September, a sharp decline from 0.5 percent growth in previous quarter and below expected 0.2 percent.

statistics agency stated that overall output in September contracted, intensifying criticism from opposition of new Labour government, who argue that its pessimistic outlook in early weeks of office contributed to economic downturn.

When Labour government took office in July, after 14 years of Conservative rule, it described its economic inheritance as worst in deces, requiring urgent action to dress public finances. In response, Conservative Treasury spokesperson Mel Stride blamed slowdown on new government's rhetoric, claiming that its negative messaging h undermined business and consumer confidence. In meantime, Rachel Reeves used her budget to implement significant tax hikes, primarily targeting businesses, while increasing public service spending, particularly on National Health Service, and ramping up borrowing for investments.

“Improving economic growth is at heart of everything I am seeking to achieve, which is why I am not satisfied with se numbers,” Reeves said after Friday's figures.

Prime Minister Keir Starmer has said that raising economic growth is his government's number one priority over next five years. Since global financial crisis in 2008-09, British economy has underperformed relative to previous years and actually slipped into a deep recession in 2023.

Resolution Foundation think tank said British economy has been a “rollercoaster” over past year and that its medium-term performance has been “staid and stagnant” As a result of third-quarter slowdown, think tank said UK has fallen below US at top of growth leerboard of Group of Seven leing industrial economies.

“This all serves to highlight that government's mission to renew strong economic growth is both extremely hard, and absolutely necessary," said Simon Pittaway, think tank's senior economist.

One factor hobbling economy, many economists say, is Britain's departure from European Union in 2020, which has me tre more difficult. Though post-Brexit tre agreement between two sides ensured re would be no tariffs placed on goods, exporters are finding life tough.

As part of Brexit, UK also left frictionless single market and customs union, which means firms have to file forms and customs declarations for first time in years.

On Thursday evening, Bank of England Governor Andrew Bailey said “changing tring relationship” with EU has weighed on economy.

“It underlines why we must be alert to and welcome opportunities to rebuild relations while respecting decision of British people," he said.

Starmer has said he wants to improve tring relationship with EU but has ruled out possibility of Britain rejoining single market or customs union, or of a return of freedom of movement of people.

For many, that means re can only be limited improvements to current tring arrangements.

(with agency inputs)