UK economy grew faster than thought in first six months of Labour government – business live

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Introduction: UK growth in early months of Labour government revised up

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Britain’s economy has grown faster than first estimated in the first six months of the Labour government.

Updated economic data released this morning shows that the economy did not stagnate in the third quarter of last year, as Keir Starmer, Rachel Reeves and colleagues took the helm with gloomy warnings about the challenge ahead.

Having previously said GDP was flat in July-September 2024, the Office for National Statistics has recrunched the numbers and concluded the economy actually grew by 0.2% – modest growth, but better than none at all.

Growth in October-December 2024 has also been revised up, from 0.1% to 0.2%.

The performance of the economy in the last six months of Conservative rule has also been revised. Growth in Q1 2024 has been cut from 0.9% to 0.8%, while growth in April-June 2024 has been revised up from 0.5% to 0.6%.

Although these changes are minor, and historic, they do undermine the narrative that fears over Reeves’s budget plans chilled the economy to a standstill last year.

Something for Labour to ponder at their party conference this week, where the prime minister is expected to tell members that his economic strategy can be the “antidote to division”.

GDP figures for 2025 have not been revised though – the economy still grew by 0.7% in January-March, slowing to 0.3% in April-June.

And the big picture is that the level of GDP in Quarter 2 2025 compared with Quarter 4 (Oct to Dec) 2023 is now estimated to be 2.9% higher, revised up from the first estimate of 2.6%, the ONS says.

ONS director of economic statistics Liz McKeown explains:

“Today’s figures include a suite of improvements to our measurement of the economy, including better information on research and development and the activities of complex multinational companies, alongside the usual inclusion of updated and improved data sources.

“Growth for 2024 as a whole is unrevised, though these new figures show the economy grew a little less strongly at the start of last year than our initial estimates suggested but performed better in later quarters. Quarterly growth rates for 2025 are unrevised.