The UK economy has stagnated for the second month in a row, according to new data from the Office for National Statistics (ONS), marking a worrying start for the new Labour government.
The latest GDP figures, released today, reveal that the economy showed no growth in July, mirroring the 0% expansion recorded in June, a stark contrast to the growth experienced earlier in the year.
Under the previous Conservative government led by Rishi Sunak, Britain’s economy grew by 0.7% during the first quarter of 2024. GDP growth in May hit 0.4%, but since Labour’s ascent to power, momentum has seemingly ground to a halt.
The stagnation of the UK economy comes at a particularly inopportune moment for Labour, which campaigned on promises of fostering growth and restoring confidence in the nation’s economic prospects. Starmer himself has branded his party as the “party for growth,” but the latest ONS data points to a slow start to delivering on that promise.
Labour’s critics have been quick to seize on the figures as evidence that the economy is faltering under the new government’s stewardship. Conservative MPs have pointed out that the economy appeared to be “going gangbusters” under their leadership before Labour’s victory in the general election. One senior Tory MP commented, “It’s telling that the economy was growing solidly under Sunak, but within months of Labour taking the reins, growth has completely flatlined.”
This dip in economic performance is particularly concerning for many, as it coincides with growing pressure from global economic factors, including the rising cost of living, high inflation, and increasing interest rates. Labour’s economic strategy, which includes a focus on green investment and infrastructure spending, has yet to materialise in a way that boosts GDP, leaving many wondering whether the party’s policies will translate into tangible growth.
The ONS data comes amid further warning signs in the UK economy. Figures show consumer confidence is also low, with households and businesses facing ongoing inflationary pressures, and there are growing concerns that Labour’s economic policies might not provide any stimulus needed to prevent a deep economic slump.
Analysts are now questioning whether Labour will adjust its strategy or stay the course in the hope of long-term recovery. While some believe it is too early to judge the government’s economic performance, the flatlining GDP in consecutive months will add pressure on Starmer and his Chancellor to reassure both markets and the public.
For now, Labour’s “party for growth” appears to be struggling to gain traction, and with no immediate signs of improvement in the figures, the government faces the difficult task of proving it can deliver the economic expansion it has promised.
The pressure is mounting — can Labour get the economy back on track, or will this flatlining continue?
