Britain's economy stumbled and contracted for the second month in a row through October as concerns over the Budget continued to undermine business confidence.
The economic downturn is the first continuous decline in production since the coronavirus pandemic began and represents a setback for new finance minister Rachel Reeves, who recently rushed through painful tax increases in her first budget.
Gross domestic product (GDP) fell by 0.1% in the month, following a 0.1% decline in September, official figures show, according to the Office for National Statistics (ONS), as Prime Minister Keir Starmer's left-wing Labor government marks its 100th day in office. . At the office.
The slump was most pronounced in the UK's main services sector, which saw no growth as manufacturing and construction industries also contracted.
BBC memo Among the sectors reported to have had a 'down month', activity in pubs, restaurants and retail trade was stagnant or down.
Two years in a row of negative growth has brought the UK inching closer to a potential recession. A recession is defined as occurring when a country experiences two consecutive quarters of negative growth.
Reeves called the numbers “disappointing,” but added: “We have put in place policies that will deliver long-term economic growth.”
Yael Selfin, chief economist at KPMG, said the BBC's activity was “depressed by the uncertainty ahead of the October 30 Budget” as businesses and consumers held back on spending.
The UK economy has grown only once in the past five months and is 0.1% lower than it was before Labor won the July election, according to Capital Economics.
“This suggests it's not just budgets that are holding back the economy,” said Paul Dales, chief UK economist at Capital.
“In fact, the drag from rising interest rates may last longer than we think.”
Although the Bank of England has cut interest rates twice this year, interest rates remain relatively high compared to recent years at 4.75%.
News of a further recession comes a week after the Prime Minister downgraded his pre-election pledge to secure the highest economic growth in the G7 from his “target”.
