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 Christmas spending 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.

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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

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

Ed Conway

Economics and data editor

@EdConwaySky

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.

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.”

Yes there are all sorts of provisos.

The UK economy is still flatlining. A 0.1% expansion 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%. 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 into account 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.

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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 could cause outsized 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.

A “loophole” that allowed a Palestinian family to be granted the right to come to the UK under a Ukrainian resettlement scheme was the subject of a lot of debate in the House of Commons today.

Both the prime minister and leader of the opposition criticised a decision by a judge to allow the family of six the right to enter the UK.

Sir Keir pledged to close the “loophole” after he was asked about it by Kemi Badenoch – but could not elaborate on what it was.

Sky News has read through the judgment given by Judge Hugo Norton-Taylor to understand what happened.

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Why did the family apply?

The family of six, a husband and wife and their children aged 18, 17, eight and seven, lived in Gaza and their homes were destroyed after the 7 October attacks and subsequent conflict.

They ended up living in a humanitarian zone and then a refugee camp.

In January 2024, the family applied to come to the UK via the Ukraine Family Scheme form, in a bid to join one of the parent’s brothers, who is a British citizen and has lived in the UK since 2007.

While they acknowledged they were not eligible for the Ukraine scheme, the family chose to apply in an attempt to use the Home Office‘s policy on “applications for entry clearance outside the rules”.

The Home Office rejected the request, saying they were not satisfied there were “compelling, compassionate circumstances” to justify a request outside the rules.

They also noted the lack of a resettlement scheme for Palestinians.

Read more:
Judge ‘wrong’ to let Gaza family settle in UK
Palestinian family allowed to settle in UK

The appeals

Despite the Home Office saying there were no grounds to appeal, the family launched one against the decision on human rights grounds.

A judge then ruled that the initial rejection constituted a rejection of human rights, and so allowed an appeal.

Part of this appeal was under Article Eight of the European Convention on Human Rights – the right to a family life between the man living in Britain and his family in Gaza.

This appeal was rejected, with a lack of a Palestinian resettlement scheme noted as a reason.

An appeal was launched at a higher tribunal – and one of the arguments was that the case should be considered on its own merits and not allow the lack of a Palestinian resettlement scheme to outweigh other arguments.

The loophole

It is here that the “loophole” seems to have appeared.

At this point. Judge Norton-Taylor heard the case and allowed the appeal.

In his judgment, he stated that it was “wrong to have taken the absence of a resettlement scheme into account at all”.

The judge added that there was “no evidence” he had seen that the Home Office had made a deliberate decision not to implement a Palestinian resettlement scheme.

He also noted that the lack of immigration rules on a topic should not count against someone.

In layman’s terms, the argument seems to be that just because a scheme to resettle people does not exist it does not mean they are banned from coming to the UK via humanitarian routes.

The judgment said the absence of a “resettlement scheme was irrelevant” to their decision.

What next?

Judge Norton-Taylor went on to back the claim from the family in Gaza based on the ECHR and the right to a family life between them and their relative in Britain.

A Home Office spokesperson said: “The Ukraine Family scheme was clearly set out for Ukrainians. We have been clear that we do not agree with this judgment and we twice vigorously contested this case.

“As the prime minister made clear, article 8, the right to a family life, should be interpreted much more narrowly. It is for the government and Parliament to decide who should be covered by the UK’s safe and legal routes.

“We are pursuing all legal avenues to address the legal loophole which has been exploited in this case. The home secretary is urgently reviewing this case to ensure the correct processes are always followed and existing laws correctly interpreted.”

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They added that there was no evidence to support the argument and that data from the government shows a “very small” number of Gazans have been allowed to enter the UK – equal to roughly 150.

Sir Keir said he was planning to close the loophole, but it is not clear what this will entail.