Britain is growing in spite of Labour, not because of it

Rising GDP figures from Q3 2026 indicate growth, but they do not necessarily signal a successful Labour government, according to shadow Chancellor Andrew Griffith. Despite the positive data, Griffith warns that the economic picture remains mixed and uncertain. GDP increased by 0.7% in Q3 2026, up from 0.5% in Q2, and is 1.9% higher compared to the same period last year. However, this growth is modest and not far from expectations, especially considering global shocks and rising inflation.

The main contributors to this growth have been technology and business services, including IT and computer equipment. These sectors have benefited from the global AI boom, and Britain's position outside the EU has shielded it from excessive AI regulation, positioning the country to capitalize on this trend. The Bank of England estimates that AI-related activity accounts for one-fifth of all growth since the start of the year, making it a significant growth driver.

However, there are concerning aspects to the data. Construction, a sector that Labour promised to boost, contracted by 0.7% in Q3, with indices in negative territory since Labour's government took office. Construction has been struggling since Labour's rise to power, with the Office for Budget Responsibility now forecasting 190,000 fewer new builds than expected just a few months prior.

Another worrying trend is the disparity between public and private sector components of GDP. Public sector spending and investment have grown by 20% since 2019, while the private sector has only seen a 3.2% growth in the same areas. This imbalance is problematic and exacerbates the economic situation.

In the real world, families anticipate more challenging months ahead due to expensive energy bills, persistent inflation, and rising interest rates. Hardworking households and businesses are about to face further challenges as they have kept the economy moving. Therefore, it is premature to celebrate the growth, as the government's policies are hindering progress rather than facilitating it.