LONDON — Recent reports reveal that the British economy experienced stagnation during the third quarter of the year, according to revised data released on Monday. This news presents yet another setback for the newly formed Labour government, which has prioritized economic growth since assuming office.

The Office for National Statistics adjusted its previous assessment of the economy’s performance from a slight growth of 0.1% to a complete standstill for the period spanning July through September. The agency attributed this revision to newly available survey data indicating a decline in business activities in the hospitality sector, particularly among bars and restaurants.

This adjustment has fueled criticism, leading detractors to claim that Labour painted an overly bleak picture of the economy when it took power on July 5. The government characterized its economic inheritance from the prior Conservative administration as the worst in decades. Following Labour’s victory in the July elections, Treasury chief Rachel Reeves committed to stimulating economic growth, yet the reported stagnation marks a troubling trend for the subsequent months.

Reeves acknowledged the significant challenge of revitalizing the economy and addressing the public finances, which have suffered from prolonged neglect over the past 15 years. In late October, during her first budget presentation, she increased taxes on businesses, aiming to bolster public financial resources and support struggling services.

However, numerous economists have voiced concerns that this budget may have exacerbated the situation, as businesses respond to tax hikes by either increasing their prices or downsizing their workforces. Mel Stride, the Conservative party’s spokesperson on economic matters, expressed alarm, stating that “warning lights are flashing” regarding the country’s economic health. He noted that after inheriting a rapidly growing economy within the G-7 nations, Labour has now overseen a decline in economic growth.