IoD press release The UK ended 2024 on a strong note, but headwinds to growth are rising
Commenting on ONS data that showed GDP rose by 0.4% in December 2024, following growth of 0.1% in November, Anna Leach, Chief Economist at the Institute of Directors, said:
“The UK ended 2024 with a welcome growth surprise. Q4 growth eked into positive territory at +0.1%, beating the Bank of England’s expectation that the economy would shrink by 0.1%. For the year, this meant growth of 0.8%, following growth of 0.4% in 2023. Professional, scientific and technical activities drove growth in December, and indeed was the strongest growth sector over 2024. Growth this year should be supported by further falls in interest rates. But headwinds to growth are building, from both the international environment and a rapidly softening labour market.
“It is welcome to see signs of life in the economy at the end of 2024. 2025 has already seen a welcome change in tone from the government, with the Chancellor firmly expressing the growth priority. The government has a strong policy pipeline to help improve the environment for investment in the UK, which is key to driving up productivity and growth. Action on industrial strategy, planning reform and infrastructure planning will be instrumental in supporting private sector confidence and investment further out. But businesses are looking for action now that will support their growth ambitions. The government should seek to take the breaks off the private sector through moves to address the tax burden, particularly the costs of employment, and to improve the UK’s trading relationship with the EU.”
