a contraction in September. The Office for National Statistics (ONS) attributed the slowdown to a decline in activity across various sectors, including pubs, restaurants, and retail, which reported "weak months."
Chancellor Rachel Reeves acknowledged the disappointing figures while emphasizing the government's commitment to long-term economic growth through its implemented policies. The back-to-back contractions in October and September mark the first such occurrence since the onset of the COVID-19 pandemic in March and April 2020.
The UK economy contracted for the second consecutive month in October, shrinking by 0.1%. This decline followed a contraction in September and came despite initial expectations of a return to growth. The Office for National Statistics (ONS) attributed the slowdown to a decline in activity across various sectors, including pubs, restaurants, and retail, which reported "weak months."
Shadow Chancellor Mel Stride blamed the government's policies and "continually talking down the economy" for the economic downturn. KPMG's chief economist, Yael Selfin, echoed these concerns, stating that uncertainty surrounding the October 30th Budget led businesses and consumers to hold back on spending.
However, the ONS noted that some sectors, such as real estate, law firms, and accountancy, experienced a surge in activity prior to the Budget announcement.
Separately, a December survey by market research firm GfK revealed a slight improvement in consumer confidence regarding personal finances for the year ahead. However, the survey also indicated that "views on the economy are unchanged from November," suggesting a lack of clarity about the future economic direction. Neil Bellamy, consumer insights director at NIQ GfK, attributed this subdued confidence to a "continuing uncharitable view on the UK's general economic situation."
Prior to the Budget, then-Prime Minister Sir Keir Starmer had warned of a "painful" budget following 14 years of Conservative rule. He later denied that these statements were intended to "talk down the economy."
The economy has grown just once over the past five months, ONS figures show.
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