Reactions to latest GDP figures

Friday, 12 September 2025 07:41

An HM Treasury Spokesperson said: "We know there's more to do to boost growth, because, whilst our economy isn't broken, it does feel stuck. “That's the result of years of underinvestment, which we're determined to reverse through our Plan for Change. We're making progress: growth this year was the fastest in the G7; since the election, interest rates have been cut five times, and real wages have risen faster than they did under the last government. "There's...Request free trial

An HM Treasury Spokesperson said:

"We know there's more to do to boost growth, because, whilst our economy isn't broken, it does feel stuck.

“That's the result of years of underinvestment, which we're determined to reverse through our Plan for Change. We're making progress: growth this year was the fastest in the G7; since the election, interest rates have been cut five times, and real wages have risen faster than they did under the last government.

"There's more to do to build an economy that works for, and rewards, working people. That's why we are cutting unnecessary red tape, transforming the planning system to get Britain building, and investing billions of pounds into affordable homes, Sizewell C, and local transport across the country.”

Conservative response to GDP figures

Sir Mel Stride MP, Shadow Chancellor of the Exchequer, said:

“Any economic growth is welcome - but this Government is distracted from the problems the country is facing.

“While the Government lurch from one scandal to another, borrowing costs recently hit a 27-year high - a damning vote of no confidence in Labour that makes painful tax rises all but certain.

“It is little wonder that Starmer has stripped Reeves of control over the budget. But sidelining her is not enough - he must also reject her failed economic approach that has left Britain poorer.”

Notes to Editors:

This Government is distracted:

Peter Mandelson has resigned as US ambassador after Keir Starmer expressed ‘full confidence' in him following revelations about the ambassador's relationship with Jeffrey Epstein. BADENOCH:‘Does the Prime Minister have full confidence in Peter Mandelson?' STARMER: ‘Let me start by saying the victims of Epstein are at the forefront of our minds. He was a despicable criminal who committed the most heinous crimes and destroy lives of so many women and girls. The ambassador has repeatedly expressed his deep regret for his association with him. He is right to do so, and I have confidence in him, and he is playing an important role in the UK- US relationship' (Prime Ministers Questions, 10 September 2025, archived).

This follows the Deputy Prime Minister, Angela Rayner, resigning for underpaying tax.‘Angela Rayner has resigned as deputy prime minister and housing secretary after failing to pay enough tax on her £800,000 flat in Hove' (BBC News, 5 September 2025, link).

While the Government lurch from one scandal to another, borrowing costs are rising:

Borrowing costs have increased dramatically, with long-term bond yields climbing to their highest levels since 1998. UK 30-year gilt yields reached 5.72 per cent on 2 September 2025, a 27 year-high, compared with 4.689 per cent on election day (Market Watch, 30 Year Gilt, accessed 3 September 2025).

Andrew Sentence, former Monetary Policy Committee member, said unless Labour's policies are reversed, the country is ‘heading for an economic crash'. SENTANCE: ‘Rachel Reeves is on course to deliver a Healey 1976-style crisis in late 2025 or 26. Like Healey, she has massively boosted public spending, borrowing and taxes – fuelling both demand-pull and cost-push inflation. Unless policies are reversed, we are heading for an economic crash. We've still got bond yields that are even higher than the US. In fact, we're even higher than Greece when it comes to borrowing costs, which is an indictment of where the UK is at the moment, or where it's perceived to be by the financial markets' (The Telegraph, 23 August 2025, link).

Professor Jagjit Chadha, former head of the National Institute of Social and Economic Research said the fiscal situation is ‘as perilous the period leading up to the IMF loan of 1976' and could imagine a bailout happening. Speaking to the When Facts Change Substack, Professor Chadha said the financial situation was ‘as perilous the period leading up to the IMF loan of 1976”, when Britain had to be bailed out by the global banking body'. Chadha noted: ‘I'm in a world in which I could imagine it [an IMF bailout] happening, and we'll be bereft in that case. We will not be able to roll over debt, we will not be able to meet pensions payments, benefits will be hard to pay out' (The Telegraph, 23 August 2025, link).

Keir Starmer has sidelined Rachel Reeves but not her failed economic approach:

Keir Starmer has sidelined Rachel Reeves – appointing a Budget Board to oversee Autumn Budget preparations, but has not sidelined her failed economic approach. Keir Starmer's new economic adviser Minoruche Shafik has called for a series of painful tax rises on working people – from VAT hikes to increasing National Insurance – and changes to the fiscal rules to allow even more borrowing (LBC, 24 April 2025, archived; The Financial Times, 10 September 2025, link).

Minouche Shafik previously admitted that Labour's Jobs Tax and Employment Rights Bill have undermined growth and employment. STUDIO: ‘Let me ask you about perhaps the most sensitive area of this, which is the effect of the National Insurance Contribution employers' taxation increase, which does appear to have had a pretty chilling effect on hiring and indeed on growth generally' SHAFIK: ‘Yes'… ‘I also think that we need to look at some other things like the way the labour market works. There's an employment bill that's currently working its way through parliament, which reduces flexibility for employers' (LBC, 24 April 2025, archived).

British Chambers of Commerce

Responding to the latest GDP data published by the ONS this morning, Stuart Morrison, Research Manager at the British Chambers of Commerce said:

“Today's data shows the UK economy had a subdued summer, with limited growth in the three months to July, and 0% in the month alone.

“The business landscape remains challenging, particularly for SMEs, with cost pressures impacting investment, recruitment and trade. While our latest economic forecast suggests growth of 1.3% this year, that's largely down to stronger-than-expected activity in Q1, before the impact of national insurance and tariffs.

“Inflation is proving stubborn, meaning for businesses struggling with the cost of borrowing, the pace of further interest rate cuts is likely to be slower than expected.

“The Government has acknowledged it has asked a lot of business in the past year. Our message is now clear - there must be no more taxes on business in the Autumn Budget. The Chancellor must focus on unlocking growth and productivity through business. Our recent Blueprint for Growth contains practical ideas to get businesses investing, recruiting and trading.”

CBI

Ben Jones, CBI Lead Economist, said:

"The sunshine may have lifted consumers in July, but the broader economy stayed stuck in the shade. Growth was uneven across sectors, highlighting that underlying demand remains more fragile.

“Speculation about new business taxes is casting a long shadow. Amid rising cost pressures, firms are already holding back on hiring and investment and are wary of weeks more Budget uncertainty.

"The government cannot tax its way to growth and continue to raid corporate coffers. With the Autumn Budget fast approaching, the Chancellor must deliver a decisive, pro-growth package by committing to serious tax reform. It's the structure of our system - from punitive business rates to the restrictive VAT threshold and stamp duty - that holds back economic progress, not just the rates themselves.”

Liberal Democrats

Responding to the latest GDP figures showing 0% growth for July, Liberal Democrat Treasury spokesperson Daisy Cooper MP said:

“The Government talks of going full throttle on growth but the reality is they have left the handbrake on.

“Their growth-crushing jobs tax risks hollowing out our high-streets and ministers' refusal to jettison their short-sighted red lines on cutting red tape with Europe is holding back our exporters.

“Tinkering around the edges simply won't cut it. The Government needs to scrap their jobs tax and immediately begin negotiating a bespoke UK-EU customs union to unleash our small businesses.

“Without it we won't be able to get the growth needed to rebuild our public services and protect family finances.”