YESTERDAY the Office for National Statistics (ONS) revised down its estimates of the UK’s economic growth as measured by the country’s Gross Domestic Product (GDP).
GDP is the measure of the total wealth produced by the UK and is the main indicator used by the Bank of England and economists to gauge not just the health of the economy but the direction in which it is heading.
In the case of British capitalism, the only direction is down and heading fast over the cliff into recession.
Last week the ONS was predicting a growth in GDP of 0.1%, but revised figures show GDP was actually at zero in the three months between July and September 2024.
It is now widely expected that GDP figures for the last three months of the year will show the UK economy contracting at an ever increasing rate.
While the economy is contracting, inflation is increasing at the fastest rate for eight months.
Simon French, chief economist at the Panmure Liberum investment bank, said these revised figures were consistent ‘with a lot of other indicators we’ve seen since the July general election that have shown a loss of momentum in the economy.’
He added that there was a question over whether this was just a typical slowdown after a general election or ‘whether this is something more problematic teeing up a recession next year.’
The Daily Telegraph had no doubt with an article in yesterday’s paper headed: ‘Britain on brink of recession after growth revised to zero’ by senior economics reporter Eir Nolsoe.
The Guardian newspaper went with: ‘UK growth revised down to zero; firms warn economy is heading for “worst of all worlds”.’
All the economic pages of the press and the BBC led with the news and reported on a survey by the Confederation of British Industry (CBI) of its members that found private sector firms expect to cut back on jobs, reduce output and increase prices in the new year.
This crisis has been accelerated by Labour chancellor Rachel Reeves’ Autumn budget that she claimed would lead to growth in the economy.
The main plank of this budget was a record £40 billion ‘tax raid’ on employers to ‘rebuild Britain’, including an increase in employers National Insurance contributions.
It was clear to everyone that this increase would immediately be passed on to workers through pay cuts, price rises and increased unemployment.
These increases have not yet been imposed, so when they are finally carried out, the effect on workers and their families will be even more devastating.
Meanwhile, the latest ONS figures showed that along with GDP falling there was also zero growth in living standards and that many households had been forced to rely on savings to struggle through the cost of living crisis.
Responding to these latest figures, Reeves defended her budget measures and insisted that they were only ‘fuelling our fire to deliver’ policies to fix the economy.
The Labour government’s ‘fix’ for a UK economy diving headlong into recession is to inflict all the pain on the working class and Reeves is now promising a class war to the finish.
Since it was elected in July, Labour has justified keeping the Tory cap on child benefit, and scrapped pensioners winter fuel allowance while increasing taxes that will hit wages and jobs for workers – all in the name of ‘fixing’ a bankrupt British capitalist system.
The working class will never allow itself to be dragged down by a capitalist system that is on its last legs.
The reformist leadership in the TUC have refused to lift a finger in opposition to all the attacks launched by Reeves and the Labour government.
The urgent task in the immediate period is for the working class to force a recall of the TUC congress to remove these leaders, replacing them with a new and revolutionary leadership prepared to organise a general strike to bring down the Labour government and go forward to a workers government and socialism.
Join the WRP and Young Socialists to build up the revolutionary leadership required for the victory of the British Socialist Revolution.
There is no time to lose!