Table of Contents:
The current context of the British economy
In the third quarter of 2023, the UK economy showed signs of slowing down, with an increase in Gross Domestic Product (GDP) of only 0.1% compared to the previous quarter. This figure is lower than the forecasts of economists, who expected growth of 0.2%. In addition, the month of September brought an unexpected contraction of 0.1 percent, raising questions about the ability of the Labor government, led by Prime Minister Keir Starmer,
to stimulate the economy as promised.
The Labor government’s promises
Keir Starmer said he wants to increase annual growth to 2.5%, an ambitious goal that would place him among the economic leaders of the G-7. However, recent economic data call into question the viability of such promises. Slow growth could negatively affect investor and consumer confidence, crucial elements for a sustainable recovery. The situation is further complicated by growing global uncertainty, in particular due to the protectionist policies that could emerge with the election of Donald Trump in the United States
.
The challenges of protectionism
The Governor of the Bank of England, Andrew Bailey, recently warned Chancellor Rachel Reeves not to react impulsively to any increase in tariffs by Trump. This situation could have a significant impact on British exports and economic stability. Industrial production has already shown signs of weakness, with a decline of 0.5% on a monthly basis and 1.8% on an annual basis in September. These data highlight the need for more robust economic strategies to address imminent challenges
.
Future prospects and macroeconomic data
The UK’s economic outlook remains uncertain. As the Labor government seeks to implement policies to stimulate growth, the reality of macroeconomic data suggests that there are significant obstacles to overcome. Recently, data emerged from China showing a slowdown in industrial production, while retail sales exceeded expectations. These global developments could further influence the British economy, making careful monitoring of international economic trends crucial.
