06:34 AM EST, 11/15/2024 (MT Newswires) -- The United Kingdom's gross domestic product Friday missed expectations for Q3 as after a sizzling start, GDP simmered over summer, slowing to a paltrier 0.1% quarter over quarter, said Deutsche Bank's Chief UK Economist Sanjay Raja.

Despite strength in household spending of 0.5% quarter over quarter, business investment of 1.2% quarter over quarter, government consumption of 0.6% quarter over quarter and net trade, GDP was dragged lower by more volatile bits of the gross fixed capital formation bucket -- including net acquisitions, which fell by 96% quarter over quarter.

September GDP also missed expectations, shrinking by 0.1% month over month, pointed out Raja.

Both data points will act as a drag to Q4 2024 GDP and 2024 GDP growth more generally, the bank's economist stated.

The road ahead remains "bumpy," added Raja. Budget tax measures -- particularly the employer National Insurance Contributions increase -- could start to hit business sentiment in Q4 2024 and Q1 2025 before any fiscal stimulus kicks in. Private sector investment plans may start to get trimmed.

Hiring plans are likely to be put on ice. Indeed, cracks in the labor market are already emerging. Deutsche Bank sees growth picking up a touch towards year-end.

Deutsche Bank still estimates positive momentum into 2025. But downside risks are brewing. Geopolitical risks are on the rise with the spectre of a trade war looming. For now, however, Raja remains optimistic about the path ahead with underlying momentum remaining at, or around, the trend.