UK Economy Surprises with Stronger-Than-Expected Growth, Reeves Declares 'Turning Corner'

London, October 26, 2023 – Chancellor of the Exchequer Jeremy Hunt has hailed the latest economic figures as evidence the UK is "beginning to turn a corner," following the release of data showing unexpectedly strong growth in the third quarter of 2023. The Office for National Statistics (ONS) reported today that the UK economy expanded by 0.8% in the July-September period, significantly exceeding the 0.5% growth predicted by economists and defying expectations of a contraction. This marks a significant rebound from the 0.2% contraction recorded in the second quarter.

The improved performance has been attributed to a number of factors, including a robust performance in the services sector, driven by continued strength in the hospitality and tourism industries. Construction also contributed positively, while manufacturing saw a slight increase, albeit remaining relatively subdued. Government spending, while still subject to fiscal constraints, played a supporting role in the overall growth.

Chancellor Hunt, speaking at a press conference this morning, expressed cautious optimism regarding the figures. "While we're not out of the woods yet, these figures are undeniably encouraging," he stated. "They show that the resilience of the British economy is proving stronger than many predicted. This growth is testament to the hard work of British businesses and workers, and it’s a sign that the government's plan for economic stability is starting to bear fruit."

However, Hunt cautioned against complacency. He stressed that persistent inflationary pressures and the ongoing global economic uncertainty remain significant challenges. "We must remain vigilant and continue to implement responsible fiscal policies to ensure this positive trend continues," he added. "The fight against inflation remains our priority, and we will continue to take the necessary steps to bring it down sustainably."

The positive economic news has been welcomed by businesses across the country. The Confederation of British Industry (CBI) described the figures as a "much-needed boost" but reiterated its concerns about the impact of rising energy costs and skills shortages. Similarly, the British Chambers of Commerce (BCC) expressed cautious optimism, urging the government to maintain its focus on supporting businesses through the current economic challenges.

Despite the positive growth figures, several economists remain unconvinced about the long-term outlook. Concerns persist regarding the impact of rising interest rates on consumer spending and investment, as well as the continuing pressure from global inflation and geopolitical instability. Some analysts have suggested that the growth figures may be a temporary blip, and that the UK economy could still face a recession in the coming months.

The ONS will publish further detailed economic data in the coming weeks, providing a more comprehensive picture of the UK's economic performance in the third quarter. The government's response to these figures, and its continued approach to fiscal and monetary policy, will be closely watched in the coming months as the UK navigates the complexities of the global economic landscape. The next few months will be crucial in determining whether this growth represents a genuine turning point or a temporary reprieve.