Reeves must cut the gloom to return the UK to growth

Not many people are inclined to feel much sympathy for Rachel Reeves at the moment the cut to winter fuel payments could hardly have gone down worse but she’s been dealt a dismal hand. And now the economy has stalled on her.

- JAMES MOORE

The latest official figures show that, after growing by 0.5 per cent in the three months to July, the economy has unexpectedly flatlined for a second consecutive month. The City had pencilled growth of 0.2 per cent. Investec, which was a tad more optimistic in calling for 0.3, could not find a fellow forecaster going for a flat zero. While the dominant services sector showed a modest uplift, returning growth of 0.1 per cent, production fell by 0.8 per cent and construction declined by 0.4 per cent.

The latter should pick up, as efforts to increase housebuilding gather steam and instill confidence among developers. But the decline of Britain’s makers should be of real concern. Manufacturing slumped to a record low share of 9.2 per cent of UK plc’s output during the second quarter of the year. That compares to 9.9 per cent pre-Covid, according to a Reuters calculation.