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What caused the UK economy to grow by only 0.1%?
The UK economy's growth of just 0.1% in Q3 2024 is attributed to several factors, including rising taxes and uncertainty in business investment. Following Labour's election victory, businesses have been cautious, holding back on spending decisions due to concerns about future government policies and the upcoming budget.
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What does this growth rate mean for the Labour government?
The disappointing growth rate poses challenges for the Labour government, which is under pressure to stimulate the economy. Chancellor Rachel Reeves expressed dissatisfaction with the numbers, indicating that the government must find effective strategies to boost economic activity and regain business confidence.
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How does this growth compare to previous quarters?
The 0.1% growth in Q3 2024 is significantly lower than economists' expectations of 0.2% and follows a contraction of 0.1% in September. This trend suggests a slowdown in economic activity compared to previous quarters, raising concerns about the overall health of the UK economy.
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Which sectors are contributing to the economic slowdown?
The economic slowdown is widespread, affecting various sectors. The CBI's lead economist noted that businesses across the board are adopting a cautious approach to investment, which is likely impacting sectors reliant on consumer spending and business investment.
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What are the potential long-term effects of this growth rate?
If the UK economy continues to grow at such a slow rate, it could lead to long-term challenges, including reduced job creation and lower consumer confidence. The government may need to implement policies that encourage investment and spending to avoid a prolonged economic downturn.