BRITAIN remained a “stagnation nation” today as the latest figures fuelled fears that the Tories’ £46 billion unfunded tax plan will crash the economy.
January sales saw the flatlining economy return to growth at the start of the year, the Office for National Statistics (ONS) said.
It estimated that gross domestic product (GDP) to have risen by 0.2 per cent in January, following a decline of 0.1 per cent in December.
Adjusted for inflation however, real GDP is estimated to have fallen by 0.1 per cent in the three months to January, compared with the three months to October 2023.
ONS economics statistics director Liz McKeown said: “The economy picked up in January, with strong growth in retail and wholesaling.
“Over the last three months as a whole, the economy contracted slightly.”
Experts also warned that the economy could continue to shrink after dipping into a technical recession at the end of last year.
Institute of Chartered Accountants in England and Wales economics director Suren Thiru said: “January’s recovery may have been followed by a more muted performance in February, with the significant wet weather likely to have suppressed activity despite a boost to incomes from lower inflation.”
TUC general secretary Paul Nowak said: “The Conservatives have turned Britain into a stagnation nation.
“Our economy is barely growing, real wages are still worth less than in 2008 and the only thing shooting up is household debt.
“We can’t carry on like. We need a proper economic plan to turn the country around — not just short-term Tory gimmicks.
“That means a real industrial strategy. And it means making sure that our fiscal framework supports government investment in our crumbling infrastructure and public services.”
Shadow chancellor Rachel Reeves said that the recession blew a hole in Prime Minister Rishi Sunak’s claims that his plan is working.
“Now the Conservatives risk rerunning Liz Truss’s disastrous mini-Budget with their £46bn unfunded tax plan that will crash the economy or put the future of the state pension at risk,” she said.
The head of Britain’s fiscal watchdog has warned “we don’t know” how the government’s spending plans will add up amid a lack of detail from last week’s Budget.
Chancellor Jeremy Hunt claimed: “Today’s numbers show we are making progress in growing the economy.”
His Budget announced plans for a 2p reduction in National Insurance ahead of this year’s general election.
Britain sorely needs more investment and a long-term economic strategy and the Tories’ budget plans “don’t scratch the surface”, the Institute for Public Policy Research said.
Pranesh Narayanan, research fellow at think tank, said: “0.2% GDP growth is so low that it might as well be 0. The ONS often revises these estimates when it gets more data as the year goes on, so we can't draw that many conclusions from today's stats.
"If these figures are correct, they suggest that last year's recession was shallow and short-lived. Unfortunately, the UK's challenges don't end there. The OBR expects productivity growth - the key to better living standards - to remain stagnant at half the level it was before the 2008 financial crisis.
"Britain sorely needs more investment and a long-term economic strategy, and the plans unveiled at last week's budget just don't scratch the surface."
