LONDON, Dec 23 (Reuters) - British economic output failed to grow in the third quarter, official figures showed, adding to the signs of a slowdown at the start of the government of British Prime Minister Keir Starmer.
The Office for National Statistics on Monday lowered its estimate for the change in gross domestic product output to 0.0% in the July-to-September period, down from a previous estimate of 0.1% growth.
The ONS also cut its estimate of growth in the second quarter to 0.4% from a previous 0.5%.
Starmer and his finance minister Rachel Reeves took power in early July warning of the poor state of the economy before announcing tax increases for employers in a budget on Oct. 30.
The Bank of England last week forecast that the economy will show zero growth in the fourth quarter. But it kept borrowing costs on hold because of the risks still posed by inflation.
Reeves said Monday's GDP data showed she faced a huge challenge "after 15 years of neglect" under previous Conservative-led governments. She said her budget would create sustainable long-term growth.
The ONS said there was no growth in the services sector in the third quarter. A 0.7% increase in construction was offset by a 0.4% fall in production.
Bars and restaurants as well as legal firms and advertising were among the weakest sectors in the three months to the end of September, it said.
The data also showed no growth in living standards and households dipped into their savings although they remained high by historic standards.
The ONS said Britain's current account deficit shrank to 18.1 billion pounds in the third quarter from 24 billion pounds in the April-to-June period.
The Reuters poll of economists had pointed to a shortfall of 22.5 billion pounds.
Sterling was little changed after the ONS data.
Writing by William Schomberg Editing by Muvija M and Andy Bruce
Source: Reuters