HOLDING down workers’ pay is putting the economy in a “doom loop,” trade union leaders warned today as the latest figures showed a fall in gross domestic product (GDP) growth.

The Office for National Statistics (ONS) revealed that while the economy unexpectedly grew by 0.1 per cent in November, GDP still contracted by 0.3 per cent over the three months to November.

The economy also declined by 0.3 per cent in the third quarter of 2022, from July to September, and Britain would therefore enter a technical recession if a further fall was recorded for the final quarter of the year.

Inflation started to cool down in November, dropping to 10.7 per cent from a 41-year high of 11.1 per cent a month earlier, and it is expected to drop further through 2023.

TUC general secretary Paul Nowak said that people’s living standards had already plummeted and that the falling GDP rate was now putting jobs and businesses at risk.

“But there is little sign that [Prime Minister] Rishi Sunak’s government has any kind of plan to get our economy quickly back to growth,” he said. 

“We urgently need workers to have more spending power to help the UK bounce back from decline.

“But instead, ministers are going all out to hold down pay. That’s only going to make a bad situation worse and keep us in a doom loop.”

Labour’s shadow chancellor Rachel Reeves called the results “just another page in the book of failure that is the Tory record on growth.”

She said: “The news of further economic pain will be deeply concerning to families already struggling with the soaring cost of living.

“People will be asking themselves whether they feel better off under the Tories and the answer will be no.

“But this is not a new trend — 13 years of Tory failure and wasted opportunities have left growth on the floor and our economy weakened.”

Chancellor Jeremy Hunt claimed the government had a “clear plan” to halve inflation this year and would provide “an average of £3,500 in support for all households over this year and next.”