The British economy failed to achieve growth in the three months to September. revised numbers The British Office for National Statistics showed this on Monday.

A preliminary estimate for the third quarter published by the ONS last month showed Britain’s GDP grew by 0.1% in the period. However, final data released on Monday showed GDP growth of 0% quarter-on-quarter.

The British pound was slightly lower against the U.S. dollar on Monday, trading at around $1.2566 at 8:37 a.m. London time.

Monday’s figures deal another economic blow to Britain after a series of weak data prints dampened sentiment and raised questions about the newly elected Labor government’s financial strategy.

Earlier this month, data from the ONS showed that the UK economy unexpectedly contracted by 0.1% in October. It was the country’s second consecutive monthly GDP decline, following a 0.1% decline. in September.

Looking ahead, Paul Dales, chief UK economist at Capital Economics, said he expected the UK economy to remain stagnant in the final quarter of 2024 – but his assessment was not entirely pessimistic.

“Overall, these data suggest that after hitting a record high in the first half of the year, the economy stalled in the second half due to a combination of the ongoing burden of higher interest rates, weaker external demand and some concerns about economic policies in the budget,” he said in a note on Monday.

“We expect 2025 to be a better year for the economy than 2024. However, recent data suggests that the economy no longer has much momentum as the year ends.”

Meanwhile, inflation appears to be rising again. The ONS said last week that UK inflation rose to 2.6% in November, marking the second consecutive month of price increases.

The Bank of England then left its key interest rate unchanged at 4.75%. While markets were not expecting a rate change at Thursday’s Monetary Policy Committee (MPC) meeting, there was surprise that three MPC members voted for a rate cut (a Reuters poll had predicted only one member would vote for a rate cut would).

While Governor Andrew Bailey has previously suggested four rate cuts could be possible next year, traders are divided over when the Bank of England will cut interest rates again. LSEG data shows markets are expecting further dovishness at the MPC meeting in February, with a slim majority of traders expecting a 25 basis point rate cut in March.

This came after British Finance Minister Rachel Reeves presented the Labor government’s first budget at the end of October since replacing the long-standing Conservative government in July.

The budget included plans by Prime Minister Keir Starmer’s government to increase taxes by 40 billion pounds ($50.5 billion). Reeves said at the time that this would be achieved through a series of new measures, including an increase in employers’ social security contributions – an income tax – as well as an increase in capital gains tax, etc Elimination of winter fuel payments to pensioners.

Some of the guidelines drew widespread criticism. The rise in National Insurance payroll tax, for example, has led to warnings from companies that they will be less likely to hire new workers, with a report from recruitment site Indeed earlier this month suggesting the scheme has already had an impact on job vacancies in the UK.