Reeves effect sees growth shrinking even before impact of Budget kicks in

CHANCELLOR Rachel Reeves has faced fresh condemnation over her policies as figures showed the economy is shrinking.

- Martyn Brown

Gross domestic product - which measures the value of goods and services produced in the UK contracted in September, according to official data, in another humiliating blow for the Government.

The Labour Party has made growth a key part of its pitch to the general public.

Overall, the economy grew by 0.1% between July and September, which is a slowdown after 0.5% growth in the previous quarter, the Office for National Statistics said.

The grim data has come before the impact of the Chancellor's Budget tax raid is felt. It has also prompted Tory warnings of further tax rises if the Government fails to get a grip of the economy.

Ms Reeves admitted that she is "not satisfied" with the way the economy is going.

She added yesterday: "Improving economic growth is at the heart of everything I am seeking to achieve, which is why I am not satisfied with these numbers." Speaking to reporters at Tokamak Energy in Abingdon, Oxfordshire, the Chancellor said she wanted growth to "be stronger, to come sooner, and to be felt by families right across the country".

Meanwhile, visiting workers at a North Wales aviation factory, Prime Minister Sir Keir Starmer said the growth figures are "not good enough, not satisfactory".

Liz McKeown, ONS director of economic statistics, said some sectors like retail and construction performed well, but added: "Generally, growth was subdued across most industries in the latest quarter." Several experts said the September slowdown could have been down to companies holding back on spending decisions until after the Budget.