KPMG UK comments on today’s GDP data

“The UK economy grew by just 0.1% in the third quarter, driven by stronger investment and consumer spending. Underlying momentum is weak, with the economy contracting in September, however, this was partly driven by the cyber disruption faced by some vehicle manufacturers. We expect this weakness to carry forward into the final quarter of the year, taking overall growth to around 1% in 2025. 

“Consumer spending grew by 0.2% in the third quarter. The likelihood of a sustained pick up in near-term activity is unlikely, and a significant fiscal tightening in the upcoming Budget could put most of the burden on households. Given fragile consumer confidence and a softening labour market, consumers are likely to remain cautious for now.

“While the near-term growth outlook is weak, conditions for a pickup in growth next year are building. Greater clarity on medium term fiscal plans, a lower risk of further tax increases and the modest easing in interest rates should together help support businesses investment. While consumer spending could benefit from a rise in real wage growth as inflation continues to moderate.”