January 2024 GDP figures - reactions

The Chancellor Jeremy Hunt's response to ONS January 2024 GDP statistics is below:

Chancellor of the Exchequer Jeremy Hunt said:   

“While the last few years have been tough, today’s numbers show we are making progress in growing the economy - part of which makes it possible to bring down national insurance contributions by £900 this coming year. But if we want the rate of growth to pick up more we need to make work pay which means ending the unfairness of taxing work twice.”

Notes to editors

Additional information 

• The OBR expects the economy to grow by 0.8% this year and 1.9% next year – 0.5% higher than their autumn forecast. After that growth rises to 2%, 1.8%, and 1.7% in 2028. 
• The OBR expects that policies announced in this Budget and in the previous two fiscal events will increase the size of the economy by 0.7% by 2028-29. This is through increasing total hours worked by the equivalent of more than 300,000 full-time workers and boosting business investment by £14billion. 
• The OBR has concluded that measures in the Spring Budget will reduce CPI inflation by 0.2% in 2024-25. 
• Full expensing is the biggest business tax cut in modern British history worth over £50 billion over the next five years – helping companies to invest for less.   
• Since 2010, the UK has grown faster than any other European economy in the G7. 
• Inflation halved last year and is forecast to fall to around 2% in a few months time, wages have been rising faster than inflation for six months in a row, unemployment is still near record lows and forecasters agree that growth will strengthen over the next few years - with the Bank expecting a rebound in growth for the first quarter of this year. 
• The IMF forecast we will grow faster than Japan, Germany, France and Italy on average over the next five years. 

Rachel Reeves, Labour’s Shadow Chancellor of the Exchequer, responding to the latest GDP figures, said:

“After fourteen years of economic decline under the Conservatives, Britain is worse off. Rishi Sunak’s claims that his plan is working are already in tatters after Britain was hit by recession last year.  

“Now the Conservatives risk re-running Liz Truss’ disastrous mini-Budget with their £46 billion unfunded tax plan that will crash the economy or put the future of the state pension at risk.

“It’s time for change. Rishi Sunak should get on with calling the election so Britain has the chance to vote for a changed Labour Party that will deliver more jobs, more investment and put more money in people’s pockets.”

Ends

Notes:

The Conservatives' record on the economy:

The Conservatives are the party of low growth

• Under the Conservatives, GDP has grown at 1.5% a year on average since 2010. But with Labour, between 1997 and 2010, it grew on average at 2%.^[i]

• Under the Conservative, the UK’s economic growth has been at the bottom third of Organisation for Economic Co-operation and Development countries.^[ii]

The economy is now smaller than when Rishi Sunak became Prime Minister.^[iii]

The Conservatives are the party of high tax

• The tax burden is at the highest level for seventy years.^[iv]

• There have been 25 Tory tax rises since the last election and the average family will be £1,200 worse off under the Conservatives’ tax plan.^[v]

• The Government’s national insurance cut has been wiped out by the rise in council tax since the general election.^[vi]

The Conservatives are the party of high debt

• National debt is at the highest level since the 1960s.^[vii]

• Debt interest payments were worth 4.4% of GDP in the most recent financial year, and are expected to be 4.3% this year. This is higher than it has been since 1949.^[viii]

The Conservatives are the party of low living standards

Real average weekly earnings under the Conservatives have gone up by £17 or 2% since they came into government. Under Labour, wages rose by £183, or 27%, between May 1997 and May 2010.^{[ix], [x], [xi]}

This Parliament is on track to be the first in which real household disposable incomes fall.^[xii]

[1] Office for National Statistics, GDP in chained volume measures – real-time database, February 2024. Available here: https://www.ons.gov.uk/economy/grossdomesticproductgdp/datasets/realtimedatabaseforukgdpabmi

[1] OECD.stat. Available here: https://stats.oecd.org/Index.aspx?ThemeTreeId=9

[1] ONS GDP data, seasonally adjusted chained volume measures. Available here: https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/abmi/pn2

[1] Resolution Foundation, A pre-election Statement: Putting the Autumn Statement 2023 in context, November 2023

[1] Labour Party, data on file

[1] Labour Party, data on file

[1] OBR public finances databank February 2024. Available here: https://obr.uk/data/

[1] OBR public finances databank February 2024. Available here: https://obr.uk/data/

[1] Office for National Statistics, AWE: Whole Economy Historic Level (£): Non Seasonally Adjusted, February 2024. Available here: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/timeseries/md9m/emp

[1] Office for National Statistics, AWE: Whole Economy Level (£): Seasonally Adjusted Total Pay Excluding Arrears, February 2024: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/timeseries/kab9/lms

[1] Office for National Statistics, CPI Index 00: All times 2015=100, February 2024: https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/d7bt/mm23

[1] Resolution Foundation, A pre-election Statement: Putting the Autumn Statement 2023 in context, November 2023

TUC – Britain remains a “stagnation nation”

• Latest data confirms economy shrank by -0.1% in 3 months to Jan and grew by just 0.2% in Jan

Commenting on today’s (Wednesday) GDP figures showing growth falling by –0.1 per cent in the three months to January, 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.”

ENDS

Notes to editors:

- According to the OBR’s latest forecasts unsecured household debt is set to spike by £1,600 per household this year