Economic growth in the UK slowed to just 0.1% in the third quarter, according to official figures, marking a drop from 0.3% in the previous quarter and falling short of most forecasts. Former Bank of England chief economist Andy Haldane has pointed to speculation ahead of the November 26 Budget as a key factor behind the weaker performance.
Haldane, speaking on Sky News’s Mornings With Ridge And Frost, described the run-up to the Budget as a “circus” and called for reforms to prevent leaks and rumors that could harm the economy. He stated that the ongoing uncertainty has directly affected both businesses and consumers, causing them to hold back on spending.
The Budget speculation has, without any shadow of a doubt, had a direct impact on growth,” Haldane said. “It’s caused businesses and consumers to hunker down. One of the reasons we had a very weak growth number last week is because of that Budget speculation—it’s dampened people’s willingness to spend.”
He emphasized that the fear of where tax changes might land has made people more cautious, leading them to save rather than invest or spend. “If you speak to businesses, speak to consumers, their fearfulness about where the axe will fall is causing them, not unreasonably, to save rather than spend, not to put their balance sheet to work, Haldane added.
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