Economists have cautioned that Britain faces more economic challenges ahead, following a GDP slowdown to 0.1% in the three months to September.
Sanjay Raja, Deutsche Bank’s chief UK economist, warned that upcoming tax increases could further dampen business investment before Chancellor Rachel Reeves’s spending initiatives begin to show positive effects early next year.
“The road ahead remains bumpy,” Raja stated, adding that private sector investment plans may be scaled back, with hiring decisions likely to be delayed. “Cracks in the labour market are already visible.
We expect growth to pick up slightly towards year-end, with continued positive momentum into 2025. However, downside risks are emerging,” he noted.
Barret Kupelian, chief economist at PwC, raised concerns about potential economic impacts ahead of Donald Trump’s expected return to the White House, where the President-elect is likely to introduce inflationary tariffs and tax cuts.
Kupelian remarked: “The government’s recently announced spending plans should boost short-term growth.
However, the outlook has dimmed since these measures were unveiled, given the increasingly challenging global trade environment. If uncertainty continues, it could become a major obstacle for growth next year.”
