Economy shows surprise growth at end of 2024 – but living standards hit
The UK economy grew fractionally during the final three months of 2024, according to early official figures, which ease the immediate risk of a recession.
The Office for National Statistics (ONS) reported a 0.1% rise in gross domestic product (GDP) during the fourth quarter, with only a recovery for growth in services and manufacturing during December coming to the rescue.
Economists had been largely expecting a contraction of 0.1% for the three month period following a zero growth reading for the previous three months to September.
Money latest: Reaction as economy shows surprise growth
The risk of shallow recession is still there, however, because the margins between contraction and growth are so tight in the data that likely future revisions may tip the balance either way.
The wider ONS figures showed that across 2024 as a whole, total GDP grew by 0.9%.
But a closely-watched measure for living standards in the economy, GDP by head of population, showed a contraction for two consecutive quarters.
The figures maintain intense pressure on the government as it has made achieving economic growth its priority for the parliament.
Its term did not begin in a way that would bolster business and consumer confidence.
Analysis: Why relief over economy may be temporary
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Starmer defends handling of economy
Prime minister Sir Keir Starmer and his chancellor were accused of an own goal last summer after warning of a tough budget ahead to bolster dire public finances.
While October’s measures were aimed at sparing pain from working people, companies argue that hikes to employer National Insurance contributions from April will knock investment, force job cuts, and impact pay rises.
Why relief over economy in Downing Street may be temporary
Yes there are all sorts of provisos. The UK economy is still flatlining. A 0.1% expansion, in one key measure, is about as close as you can get to zero.
Gross domestic product per head – a better measure of our living standards – is shrinking (indeed, it’s been shrinking for two quarters). And the UK remains far weaker than the leading G7 economy – the United States.
But even after taking all that into account, it’s hard not to conclude that the chancellor will be celebrating today’s GDP figures. After all, economists had expected the economy to shrink by 0.1% rather than growing. Thanks to a late spurt in growth in December, it actually grew.
Moreover, up until today’s figures, the profile of economic growth in the UK was frankly pretty dismal. There was zero cumulative growth since last year’s election. Now, thanks to that jump in December – an unexpected late Christmas gift for the chancellor – cumulative growth since the election is now up to 0.4%.
Of course, none of this changes the bigger economic picture. The UK economy is still stuck in a rut. The enormous growth in migration in recent years means that, once you take account of the growing population, there is considerably less income floating around for every family than there was a few years ago.
And vast swathes of the UK economy are in desperate trouble. Most notably, the industrial sectors that used to power much of the country’s growth, are contracting at a rapid rate. That is not just a UK problem – indeed, it’s shared with much of Europe. In Germany, the economy has contracted for two successive years. This deindustrialisation is one of the most significant issues facing the continent.
And that’s before one considers a few other awkward issues: the real impact of last October’s budget have yet to be felt in the economy. The Office for Budget Responsibility is widely expected to slash its growth forecasts next month, which could prompt the chancellor to further trim spending in the coming years.
Then there are other, even more profound challenges. What happens if and when the US imposes far-reaching tariffs on UK imports? How will the UK afford the dramatic increases in defence spending the White House is demanding? Now, more than ever before, it’s quite plausible that outside events cause outsize impacts on the UK economy.
In short, while today’s numbers will be a relief in Downing Street, it’s not altogether clear how long that sense of relief will last.
That backdrop is made more painful by the fact that inflation is on the increase again, with a slew of essential bills including those for water, energy and council tax all set to rise sharply in the spring too.
At the same time as the domestic difficulties, global growth is also being challenged by Donald Trump who had threatened at the time of his election victory that universal trade tariffs were imminent.
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Bank governor on “depressing” growth outlook
New projections from the Bank of England last week made for sobering reading, with inflation expectations for this year hitting 3.7% from the current 2.5%.
Growth, the forecast suggested, would come in at 0.75% for 2025.
In November, the Bank had expected a figure double that sum.
A lack of growth is a problem for chancellor Rachel Reeves as it typically hits potential tax receipts at a time when her budget rules over the public finances are already under strain.
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It emerged on Wednesday that the Treasury had ordered a leak inquiry following a Bloomberg report that updated Office for Budget Responsibility forecasts sent to ministers had downgraded UK growth expectations.
Ms Reeves said of the ONS data: “For too long, politicians have accepted an economy that has failed working people. I won’t.
“After 14 years of flatlining living standards, we are going further and faster through our Plan for Change to put more money in people’s pockets.
“That is why we are taking on the blockers to get Britain building again, investing in our roads, rail and energy infrastructure, and removing the barriers that get in the way of businesses who want to expand.”
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Shadow chancellor Mel Stride responded: “The chancellor promised the fastest-growing economy in the G7, but her budget is killing growth.
“Working people and businesses are already paying for her choices with ever-rocketing taxes, hundreds of thousands of job cuts and business confidence plummeting.
“It does not need to be this way.”
UK
Teenager living in ‘continuous pain’ after surgeon Dr Yaser Jabbar carried out ‘inappropriate’ operations
A 15-year-old boy who was operated on twice by a now unlicensed Great Ormond Street surgeon is living with “continuous” pain.
Finias Sandu has been told by an independent review the procedures he underwent on both his legs were “unacceptable” and “inappropriate” for his age.
The teenager from Essex was born with a condition that causes curved bones in his legs.
Aged seven, a reconstructive procedure was carried out on Finias’s left leg, lengthening the limb by 3.5cm.
A few years later, the same operation was carried out on his right leg which involved wearing an invasive and heavy metal frame for months.
He has now been told by independent experts these procedures should not have taken place and concerns have been raised over a lack of imaging being taken prior to the operations.
Yaser Jabbar rescinded his UK medical licence last year. Pic: LinkedIn
His doctor at London’s prestigious Great Ormond Street Hospital was former consultant orthopaedic surgeon Yaser Jabbar. Sky News has spoken to others he treated.
Mr Jabbar also did not arrange for updated scans or for relevant X-rays to be conducted ahead of the procedures.
The surgeries have been found to have caused Finias “harm” and left him in constant pain.
“The pain is there every day, every day I’m continuously in pain,” he told Sky News.
“It’s not something really sharp, although it does get to a certain point where it hurts quite a lot, but it’s always there. It just doesn’t leave, it’s a companion to me, just always there.”
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Finias’s surgery pictures
Care of over 700 patients being assessed
Mr Jabbar rescinded his UK medical licence in January last year after working at Great Ormond Street between 2017 and 2022.
The care of his 700-plus patients is being assessed, with some facing corrective surgery, among them Finias.
“Trusting somebody is hard to do, knowing what they have done to me physically and emotionally, you know, it’s just too much to comprehend for me,” he said.
“It wasn’t something just physically, like my leg pain and everything else. It was emotionally, because I put my trust in that specific doctor. My parents and I don’t really understand the more scientific terms, we just went by what he said.”
Doctors refused to treat Finias because of his surgeries
Finias and his family relocated to their native Romania soon after the reconstructive frame was removed from his right leg in the summer of 2021.
The pain worsened and they sought advice from doctors in Romania, who refused to treat Finias because of the impact of his surgeries.
Dozens of families seeking legal claims
His mother Cornelia Sandu is “furious” and feels her trust in the hospital has been shattered. They are now among dozens of families seeking legal claims.
Cyrus Plaza from Hudgell Solicitors is representing the family. He said: “In cases where it has been identified that harm was caused, we want to see Great Ormond Street Hospital agreeing to pay interim payments of compensation for the children, so that if they need therapy or treatment now, they can access it.”
Finias is accessing therapy and mental health support as he prepares for corrective surgery later in the year.
A spokesperson for Great Ormond Street Hospital told Sky News: “We are deeply sorry to Finias and his family, and all the patients and families who have been impacted.
“We want every patient and family who comes to our hospital to feel safe and cared for. We will always discuss concerns families may have and, where they submit claims, we will work to ensure the legal process can be resolved as quickly as possible.”
Finias with his mother and sister
Service not ‘safe for patients’
Sky News has attempted to contact Mr Jabbar.
An external review into the wider orthopaedic department at the hospital began in September 2022.
It was commissioned after the Royal College of Surgeons warned the hospital’s lower limb reconstruction service was not “safe for patients or adequate to meet demand”.
The investigation is expected to be completed by the end of the year.
Sir Keir Starmer has said closer ties with the EU will be good for the UK’s jobs, bills and borders ahead of a summit where he could announce a deal with the bloc.
The government is set to host EU leaders in London on Monday as part of its efforts to “reset” relations post-Brexit.
A deal granting the UK access to a major EU defence fund could be on the table, according to reports – but disagreements over a youth mobility scheme and fishing rights could prove to be a stumbling block.
The prime minister has appeared to signal a youth mobility deal could be possible, telling The Times that while freedom of movement is a “red line”, youth mobility does not come under this.
His comment comes after Kaja Kallas, the EU’s high representative for foreign affairs, said on Friday work on a defence deal was progressing but “we’re not there yet”.
Sir Keir met European Commission president Ursula von der Leyen later that day while at a summit in Albania.
Ursula von der Leyen and Sir Keir had a brief meeting earlier this week. Pic: PA
If agreed, the deal will be the third in two weeks, following trade agreements with India and the US.
Sir Keir said: “First India, then the United States – in the last two weeks alone that’s jobs saved, faster growth and wages rising.
“More money in the pockets of British working people, achieved through striking deals not striking poses.
“Tomorrow, we take another step forward, with yet more benefits for the United Kingdom as the result of a strengthened partnership with the European Union.”
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Conservative leader Kemi Badenoch has said she is “worried” about what the PM might have negotiated.
Ms Badenoch – who has promised to rip up the deal with the EU if it breaches her red lines on Brexit – said: “Labour should have used this review of our EU trade deal to secure new wins for Britain, such as an EU-wide agreement on Brits using e-gates on the continent.
“Instead, it sounds like we’re giving away our fishing quotas, becoming a rule-taker from Brussels once again and getting free movement by the back door. This isn’t a reset, it’s a surrender.”
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