The UK economy experiences slower-than-expected growth of 0.1% in the third quarter.

• In the three months leading up to September, Gross Domestic Product (GDP) was 0.1% lower than the previous quarter.
• The 0.2% growth expected by economists polled by Reuters is below the 0.5% expansion seen in the second quarter of the year.
• Since September, the U.K.'s inflation rate has fallen sharply, dropping below the Bank of England's 2% target for the first time since April 2021.

Initial figures revealed that the U.K. economy experienced less growth than anticipated in the third quarter, with only marginal expansion following a strong rebound at the beginning of the year.

In the three months to September, Gross domestic product was 0.1% lower than the previous quarter, which is below the 0.2% growth predicted by economists surveyed by Reuters. This follows a 0.5% increase in the second quarter of the year.

The U.K.'s dominant services sector experienced growth of only 0.1% in the quarter, according to the Office for National Statistics. In contrast, construction grew by 0.8%, while production slipped by 0.2% in the month.

Inflation in the U.K. fell sharply to 1.7% in September, below the Bank of England's 2% target for the first time since April 2021. This decline helped the central bank cut rates by 25 basis points on Nov. 7, bringing its key rate to 4.75%.

The Bank of England expects the Labour Government's tax-raising budget to increase GDP by 0.75 percentage points in a year's time. Additionally, policymakers noted that the government's fiscal plan has led to an increase in their inflation forecasts.

The U.K. Finance Minister, Rachel Reeves, expressed her dissatisfaction with the figures on Friday.

"I made tough decisions to repair our financial stability and now we will invest and reform to create jobs, revitalize the NHS, rebuild Britain, and secure our borders in a decade of renewal," she stated in a press release.

According to Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, a rate cut at the BOE's next meeting in December is now unlikely due to inflation risks and global headwinds.

According to Thiru, the economy began to slow down before the budget was released, as declining business and consumer confidence contributed to a decrease in output during the third quarter, particularly in September.

The uncertainty about the global economic impact of another term from President-elect Donald Trump has increased due to the outcome of the recent U.S. election. While Trump's proposed tariffs are predicted to be inflationary and negatively affect the European economy, some analysts believe that such measures could present chances for the British economy.

Last week, Bank of England Governor Andrew Bailey did not reveal much about the bank's stance on President Trump's tariff plan, but he did mention the risks associated with global division.

During a press briefing, he stated that he would not make any judgments about what might or might not happen, and that they should wait and see where things develop.

The pound slightly increased by 0.1% against the U.S. dollar at 7:33 a.m. in London. It decreased by 0.15% against the euro after Friday's GDP release.