I have already written about growth this morning and how I frame the issue, which is very different from how I think Rachel Reeves does.
Now there is new growth data from the Office for National Statistics for the third quarter of this year. As they say:
Main Points
- UK real gross domestic product (GDP) is estimated to have increased by 0.1% in Quarter 3 (July to Sept), compared with growth of 0.3% in Quarter 2 (Apr to June) 2025.
- GDP is estimated to have increased by 1.3% in Quarter 3 2025, compared with the same quarter a year ago.
- In output terms, growth in the latest quarter was driven by increases of 0.2% in services and 0.1% in construction; the production sector fell by 0.5%.
- Real GDP per head is estimated to have shown no growth in the latest quarter and is up 0.8%, compared with the same quarter a year ago.
- We have updated our estimates for Quarter 1 (Jan to Mar) 2024 to Quarter 2 2025 to be consistent with our UK trade release published on 16 October 2025; this update includes the full implementation of improvements to the measurement of precious metals.
- There are no changes to headline real GDP quarter-on-quarter growth across 2024 and 2025 as a result of this data update; however, there were some minor 0.1 percentage point revisions to the change in the GDP implied deflator and the change in GDP in current prices for some quarters.
In real terms, what this means is that just about no one will feel any better off, at all, as a consequence of what Rachel Reeves has achieved as Chancellor, and many might feel worse off, whether or not they are.
I stress, growth for growth's sake is not, in my opinion, the goal of the economy. That is, instead, a sure way to climate devastation. But Rachel Reeves has set this as the objective, and by her own measure, she has failed.
As a background to a Budget, this is grim news for her.
No wonder Labour MPs and even Cabinet Ministers think she and Starmer have failed. Objectively, she has.
I will start publishing my alternative Budget very soon. The question, though, as I have already asked this morning, is whether Reeves can now deliver one that has any prospect of implementation. I increasingly doubt that she can. It is often said that all political careers end in fauoure. I have a feeling that is where Rachel Reeves is headed, and rather sooner than she might ever have anticipated.
The problem is, the alternative is Darren Jones.
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Deficits should never be cut. In the MMT model when inflation arrives you cut consumption taxes. This politician in charge of public finances is really bad.
Conclusion: let’s have even more of the public finances decided by politics and always increasing deficits.
The announcement of thousands of job losses in the NHS yesterday made me think, how can we possibly get growth, when the government is adding to the pile of redundancies. Regardless of the arguments relating to duplication of jobs in NHS England, these jobs gave people an income, which they spent into the economy. If you take away income from 18000 people, it will have an impact on the economy. The government seems to think only the private sector can create growth. They are clueless.
I imagine the NHS layoffs are part of the government’s capitulation to American Big Pharma and Trump’s tariff threats. Cut costs in anticipation of higher prices, maybe? Or prepare the way for Palantir to get its hands on the treasure trove that is NHS data? It’s funny how the market —i.e., the NHS —doesn’t get to set prices for medicines. It’s lobbyists and pressure from a gangster president. It’s not what they are worth; it’s what they can force you to pay. And a bully doesn’t stop at taking your lunch money just the once, and the capitalists hate having money being spent that they can’t access. I once read about an American politician lamenting that billions were spent each year on education, and the private sector wasn’t allowed to wet its beak. That’s the mentality of modern capitalists.
There is no possibility of Reeves delivering anything meaningful for UK citizens. She is functionally incapable of doing this & indeed was chosen for that reason. Lots of your blogs & btl have discussed this. She is a cipher/puppet, strings pulled by BoE and the UK’s finance sector. Here sucessor – Darren – has been groomed along the same lines (we are in Chmosky-Marr territory).
The Tory alternative is to ‘run a surplus’ (household analogy again ) and ‘pay down debt’. As Stephanie Kelton has shown, this leads to recession as more is taken out than put in.
We really are in the desert of ideas looking at mirages.
You say, quite rightly, imho, “The problem is, the alternative is Darren Jones.”.
Who do you see, in any of the political parties or currently not an MP, that has the capability to deliver a new financial strategy that would turn the country round to a more successful direction?
Not someone who can say the right words, but who knows how things work and start to pull the right levers?
The easy bit:
Finding 80 LINO MPs who will back a PLP no confidence vote against Starmer.
The fairly easy bit:
Finding 80 scared LINO MPs, neoliberal supporters of the STP/LINO status quo to nominate a neoliberal LINO Starmer relacement. (Darren Jones already has the right spectacles and has been preparing for this career path for some time. But his Bristol NW constituents may unseat him in a GE)
The not so easy bit:
Finding someone who is willing to take the hit for the November budget and the May election results, and then fight 2029 on the usual LINO lies and then lose.
The impossible bit:
Finding 80 Labour MPs who would find and then nominate a progressive MP with the principles, the policies, the ability and the courage to significantly change direction, even as far as the social democratic 2017 manifesto or the more modest goal of actually fulfilling Starmer’s 2024 (fake) 10 pledges.
Having a policy of growth so called must be directed at increasing the well being of the population as a whole and not just for the profits of the few. Blind growth a la Reeves id meaningless and ignores the restraints of the natural world’s destruction that is threatening our very survival. Transfering 3 per cent of GDP from 2 to 5 for “defence” and building more nuclear power stations and weapons is not the answer. The looming stock market crash can also make a mockery of ‘sensible” fiscal planning.
It will have done little to help people feel better. It might do more to quiet the voices who loudly declared that the increase in Employers NI, etc, would trigger a collapse.
To some extent, it may have demonstrated that those who shout loudest for austerity measures and holding down increases in the Minimum Wage are wrong to predict doom.
What changed from the Tory austerity period has not been enough, but it may just have provided evidence that a more redistributive and fair system will not collapse the economy.
Given that, and the ability to point to Trump’s tariffs creating a drag on the economy, Reeves has an opportunity to justify a bolder approach and steer away from austerity-minus. I doubt it will be taken that way, but we can but hope.
My eyes tend to glaze over at the mention of GDP.
I know that politicians nowadays think of little else, but I never hear anyone mention it on the omnibus.
They are too busy sharing their tussles with health and housing, cost of living issues, energy bills, food inflation, and their struggles with the DWP or getting decent social care.
One of my political goals would be to abolish GDP and replace it with something more meaningful to omnibus passengers, measuring real things and doing so for specific demographic groups, including age, geolocation income, and employment.
I know you have covered this in the past, and in long form elsewhere today, and it is in the glossary.
https://www.taxresearch.org.uk/Blog/glossary/G/#gdp
Would it be possible to deconstruct GDP in a shorter post or video, and suggest a not too utopian alternative that a progressive chancellor could be assessed by, even by journalists with the attention span of a gnat? Something Zack Polanski could fit into an interview or BBCQT comment before they fade him out and go back to Fa***e?
Let me think about that…
Growth should be the (pleasant) outcome of delivering what the public need not some sort of target to be achieved.
Agreed
What is really depressing is that the BBC thought police wont ask if there is any way of assessing the options for the budget other than from the perspective of the presiding gods – the ‘bond markets’.
Thus radio 4 this morning – ‘would it upset the markets if Reeves were replaced?’ Howard Davies – ‘not if the replacements was from the same wing of the party’.
In other words TINA other than ‘balancing the books’ and ‘reducing government debt’ .
Everything from the point of view of finance – nothing about the real society and economy which is wrecked and will be even more wrecked if this goes on.
Keynes must be turning in his grave.
“The problem is, the alternative is Darren Jones.”
Who would deliver more of the same, “fisxal rules”.
Also I am lead to believe he is an ally of Pat McFadden and favours even greater welfare “reform”.
“The problem is, the alternative is Darren Jones.”
This dude seem as bad, or maybe even worse, than Rachel Reeves!
Is this dude as incompetent as Rachel Reeves???
Yes