Rachel Reeves has been dealt a blow as zero growth puts the UK on the brink of recession.

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The British economy has been sluggish in the first three months of new Labor's term, leaving the country on the brink of recession and Rachel Reeves having to once again defend her tax hike budget.

The Office for National Statistics (ONS) lowered its growth forecast for July to September from 0.1% to zero. The standard of living also fell.

With the economy at risk of contracting next quarter, the UK is at risk of suffering a second consecutive period of negative growth. This is a scenario that meets the definition of a recession.

It is a new blow to Sir Keir Starmus' government, which has made growing the economy and improving living standards for all its core mission.

It comes a day after the Confederation of British Industry (CBI) warned the faltering economy was heading for the worst in the world by 2025, as early figures pointed to a dismal festival season with visitor numbers down 11.4% on last time. Throughout the last week before Christmas, according to Rendle Intelligence and Insights.

Meanwhile, Britain's struggling pubs and restaurants have pleaded with the Prime Minister to reconsider plans to increase employers' national insurance premiums (NICs).

Kate Nicholls, CEO of UKHospitality, said Monday's revised growth figures confirm what we already suspected: that the economy was in a fragile state and desperately needed growth.

She added: With business confidence already plummeting and a third of hospitality businesses operating below break-even, planned changes to employer national insurance premiums will make generating economic growth more difficult.

Calling on the government to reconsider its approach, she said: To protect the places and team members who work hard, it is urgently necessary to delay these changes to allow for proper consultation and engagement with businesses.

Shadow Chancellor Mel Stride said the figures showed the Prime Minister's latest failings.

Growth has plummeted under the watchful eye of Labor, which inherited the fastest-growing economy in the G7. This means greater pressure on our public finances and the economy is becoming much more vulnerable rather than safer, he warned: The warning light blinks.

Mr Reeves said the challenges facing the Government after 15 years of neglect were enormous, but the scale of the challenge only fueled our passion to deliver for workers.

The Budget and our transformation plan will deliver sustainable long-term growth, putting more money in people's pockets through increased investment and ongoing reforms, she said.

Jonathan Portes, professor of economics at King's College London, warned that while the likelihood of a recession in 2025 is low, the election of US President Donald Trump increases the risk, citing concerns about a global trade war following Trump's threat to introduce tariffs. For goods coming into the United States

Overall, Professor Portes said the latest ONS amendments were small and irrelevant. But he told the Independent it confirmed that Labor had inherited an economy struggling to grow fast enough to generate sustained growth in living standards. He urged the government to come up with a strategy to stimulate growth in the medium to long term.

Paul Johnson, director of think tank the Institute for Fiscal Studies, warned the Chancellor may have to come back for more money next autumn after announcing historic tax rises in the last Budget. He added that if the economy does not recover, Mr Reeves will find himself in a difficult situation in terms of funding public services.

But Russ Mold, investment director at investment firm AJ Bell, called for a period of stability on taxes and regulations as a way to stimulate growth. He added that the government should foster closer relationships with the incoming Trump administration to promote trade.

He told The Independent: We've had so many changes in terms of tax regulations. As long as people know what the rules are, that might not be a bad thing.

But clearly, with growth slowing, people are demanding that governments step in and take action. So it's a bit of a catch 22 situation. A period of just allowing this riding could be helpful for regulatory purposes.

CBI interim deputy director-general Alpesh Paleja said: “There is little festive cheer in the latest surveys, which suggests the economy is headed for the worst with companies expected to cut both output and employment.” . It's getting harder.

Businesses continue to cite the impact of the measures announced in the Budget, particularly the increase in employer NICs, which worsens an already tepid demand environment.

Mr Mold said Labor had clearly inherited rotten hands when it came to the economy, but expressed doubts about whether the party had tried to fix the economy in the right direction.

Labor will no doubt argue that it takes time to generate growth, and they have inherited rotten hands. I think they have been unfairly punished for the very poor state of public finances and their honesty there is commendable, he told The Independent.

I understand the need to raise money, but I'm not sure they did it the right way. Taxes always have unintended consequences.

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