UK economic growth has encountered a setback, as the government announced a modest increase of only 0.1 percent in the third quarter of 2023. This figure, which covers the period from July to September, falls short of expectations and follows a downward revision for the previous quarter. The Office for National Statistics (ONS) indicated that gross domestic product (GDP) growth for the second quarter was adjusted down from 0.3 percent to 0.2 percent, attributing part of the slowdown to a cyber attack on Jaguar Land Rover, which impacted manufacturing output.
Despite these challenges, the UK remains one of the fastest-growing economies in the G7, sharing the top spot with Japan. The ONS also raised the growth rate for the final quarter of last year to 0.3 percent, up from an earlier estimate of 0.2 percent. According to Liz McKeown, the ONS director of economic statistics, “Today’s updated figures paint the same picture as our initial estimate, with growth continuing to slow.” She noted that while the service sector showed some growth, it was offset by declines in production, particularly in car manufacturing.
The announcement comes on the heels of another concerning report: unemployment in the UK has surged to 5.1 percent, marking the highest rate in nearly five years. This increase, reported for the three months ending in October, highlights a deteriorating labour market. The rise in joblessness signals broader economic strains, with youth employment particularly affected following recent policy changes.
In a move that has further complicated the situation for consumers, the price of oil has risen amid geopolitical tensions, notably between the United States and Venezuela. As of yesterday, Brent crude oil prices increased by 0.9 percent, reaching $61 (£53) a barrel. In addition, findings from the Competition and Markets Authority revealed that British motorists are facing persistently high profit margins at fuel stations, with no clear justification for the elevated costs.
The job market for young graduates is also under pressure. The number of advertised graduate positions has nearly halved over the past year, plummeting by 45 percent in November compared to the same month in the previous year, according to data from job site Adzuna. This decline follows changes made by Chancellor Rachel Reeves, who raised the minimum wage for 18 to 20-year-olds to £10 an hour and increased Employer National Insurance contributions.
In contrast to these economic challenges, precious metals are experiencing a surge in demand. Gold prices have reached record highs, trading above $4,400 (£3,275) an ounce for the first time, reflecting a 68 percent increase since the beginning of the year. Silver has also climbed, rising by 3 percent to a record high of $69.14 per ounce. Investors are increasingly turning to these safe-haven assets amidst rising U.S. tariffs and ongoing geopolitical uncertainties.
As the UK grapples with these economic headwinds, the implications for both consumers and businesses are becoming increasingly significant. The combination of slow growth, rising unemployment, and escalating fuel prices presents a challenging landscape for the government and the public alike.
