The U.K. and Canada are grappling with economic slowdowns, with both nations reporting weaker-than-expected growth overnight amid mounting pressures heading into 2025.
The UK’s economy recorded no growth in the third quarter, according to revised data from the Office for National Statistics (ONS).
The figure was downgraded from an earlier estimate of 0.1%, reflecting broader signs of economic stagnation. Additionally, second-quarter growth was revised down to 0.4% from 0.5%.
Prime Minister Keir Starmer’s administration, which took office in July, faces significant economic headwinds, exacerbated by tax increases announced in an October budget aimed at long-term growth.
The services sector, which makes up a large portion of the U.K. economy, showed no growth in Q3, while construction rose 0.7% and production fell 0.4%.
Households, meanwhile, dipped into savings as living standards showed no improvement.
Meanwhile, Canada also reported disappointing data, with preliminary figures suggesting a 0.1% contraction in GDP for November. This followed a 0.3% gain in October, which had temporarily lifted annual growth to 1.9%.
Weakness in sectors such as mining, transportation and warehousing, and finance and insurance weighed on the November estimate, though gains in accommodation and food services, and real estate provided partial offsets.
Goods production in October grew 2.4%, driven by a recovery in oil sands extraction and mining activity, while services saw only modest growth.
The Bank of Canada has implemented five consecutive rate cuts this year to combat slowing growth. While annual inflation has returned to the central bank’s 2% target, the economy expanded just 1% on an annualised basis in Q3, down sharply from 2.2% in Q2.
Policymakers have signaled that further rate cuts are possible in early 2025 to prevent inflation from falling too sharply.