LONDON – British Treasury chief Rachel Reeves said Friday she was “not satisfied” with official figures showing the British economy’s rebound from recession slowed sharply in the third quarter of the year , most sectors stagnating.

The Office for National Statistics said growth between July and September was just 0.1%. This was lower than the 0.5% recorded in the previous three month period and below market expectations of 0.2%.

The statistics agency said overall output actually fell in September, a development that risks fueling accusations from critics of the new Labor government that it talked about the economy going down during his first weeks in office.

Coming to power in July for the first time in 14 years, the government described the economic legacy of the former Conservative administration as the darkest in decades, forcing it to take urgent steps to repair finances public. Conservative lawmakers argued that the “pessimistic” remarks prompted businesses and consumers to delay spending decisions until Reeves presented his budget in late October.

Reeves used the budget to sharply raise taxes, mainly on businesses, as well as to increase spending on public services, such as the state-run National Health Service, and borrowing for investments.

“Improving economic growth is at the heart of everything I seek to achieve, which is why I’m not happy with these numbers,” Reeves said after the numbers.

Prime Minister Keir Starmer has said increasing economic growth is his government’s priority. priority number one over the next five years. Since the global financial crisis of 2008-2009, the UK economy has underperformed compared to previous years and even slipped into a modest recession in 2023.

According to many economists, one of the factors hindering the economy is Britain’s exit from the European Union in 2020, which made trade more difficult. Even though the post-Brexit trade deal between the two sides ensured that no customs duties would be imposed on goods, exporters are facing difficulties.

As part of Brexit, the UK also left the single market and customs union, meaning businesses have to fill out customs forms and declarations for the first time in years.

On Thursday evening, Bank of England Governor Andrew Bailey said “changing trade relations” with the EU were weighing on the economy.

“This shows why we must be attentive and welcome opportunities to rebuild relationships while respecting the decision of the British people,” he said.

Starmer said he wanted to improve trade relations with the EU, but ruled out the possibility of Britain returning to the single market or customs union, or a return to free movement of people.

For many, this means there can only be limited improvements to current trade deals.