Conservatives: Response to latest bad economic data

Andrew Griffith MP, Shadow Business Secretary, said:

“With the drumbeat of bad economic news including a 12-month low of business confidence, price rises and dismal growth figures, it is clear Labour are out of their depth and out of ideas to get the economy growing. Working people are paying the price for Labour's war on business. 

“Under new leadership, the Conservatives understand that only by backing business and wealth creators across the country can we get our economy growing and out of the economic mess Labour are creating.”

Notes to Editors:

• According to S&P Global PMI data, in January there was lower manufacturing production. The S&P Global Flash UK PMI said there was ‘lower manufacturing production' (S&P Global, Flash UK PMI, 24 January 2025, link).

• According to S&P Global PMI data, new work fell at the fastest pace since October 2023 in january. The S&P Global Flash UK PMI said: ‘total new work fell at the fastest pace since October 2023. Survey respondents cited subdued underlying demand conditions and cutbacks to non-essential spending' (S&P Global, Flash UK PMI, 24 January 2025, link).

• According to S&P Global PMI data, prices increased at the fastest pace for 18 months in January. The S&P Global Flash UK PMI said: ‘Employment levels decreased for the fourth month running, which businesses often linked to rising cost pressures. Input price inflation accelerated to its strongest since May 2023. Meanwhile average prices charged by private sector firms increased at the fastest pace for 18 months in January' (S&P Global, Flash UK PMI, 24 January 2025, link).

• According to S&P Global PMI data, that employment has fallen for four months. The S&P Global Flash UK PMI said: ‘staffing numbers continued to fall across the private sector, which extended the downfall that began in October 2024' (S&P Global, Flash UK PMI, 24 January 2025, link).

• According to S&P Global PMI data, employment is rising because of increased payroll costs. The S&P Global Flash UK PMI said: ‘Lower employment was typically attributed to hiring freezes and the non-replacement of voluntary leavers in the wake of rising payroll costs' (S&P Global, Flash UK PMI, 24 January 2025, link).

• According to Begbies Traynor, the number of businesses in ‘critical' financial distress rose by 50 per cent between Q3 and Q4 in 2024. Begbies Traynor said: ‘The number of UK businesses in ‘critical' financial distress rose by 50.2 per cent quarter-on-quarter to 46,853 in Q4 2024 (Q3 2024: 31,201)' (Begbies Traynor, Press Release, 23 January 2025, link).

• According to Begbies Traynor, the number of businesses in ‘significant' financial distress is up 21.3 per cent year on year. Begbies Traynor said: ‘Year on year, ‘significant' financial distress increased 21.3 per cent (Q4 2023: 539,900), as all 22 sectors experienced double-digit growth in 2024' (Begbies Traynor, Press Release, 23 January 2025, link).

• Barclays forecast that unemployment would increase from 4.3 per cent in 2024 to 4.7 per cent in 2025. Barclays outlook for 2025 forecast that unemployment would increase from 4.3 per cent in 2024 to 4.7 per cent in 2025 (Barclays, Outlook 2025, November 2024, link).

• Barclays forecast that inflation would fall further in 2025 to 2.3 per cent from 2.5 per cent in 2024. Barclays outlook for 2025 forecast that inflation would continue to fall from 2.5 per cent in 2024 to 2.3 per cent in 2025 (Barclays, Outlook 2025, November 2024, link).

• S&P Global forecast the economy would ‘gather steam' in 2025, growing at 1.5 per cent. S&P Global said: ‘After a slower second half this year, the U.K. economy looks set to gather steam on looser fiscal policy, with GDP rising by 1.5% in 2025 versus our September forecast of 1.2%, and maintaining a similar pace through 2027' (S&P Global, Outlook 2025, 26 November 2024, link).

• S&P Global forecast that inflation would remain stable from 2024 to 2025 at 2.5 per cent. S&P Global forecast that in 2025 CPI inflation would remain at 2.5 per cent (S&P Global, Outlook 2025, 26 November 2024, link).