The UK economy contracted for the second consecutive month in October, as concerns about the upcoming Budget weighed heavily on confidence.
Official figures revealed a 0.1% decline, contrary to expectations of a return to growth following September’s downturn.
The Office for National Statistics (ONS) reported that economic activity had either stalled or declined, with pubs, restaurants, and retail among the sectors experiencing “weak months.”
Chancellor Rachel Reeves described the figures as “disappointing” but emphasized that the government has implemented policies aimed at fostering long-term economic growth.
In contrast, Shadow Chancellor Mel Stride criticized the government’s approach, stating, “This fall in growth highlights the stark impact of the Chancellor’s decisions and the constant negative rhetoric about the economy.”
Yael Selfin, KPMG’s chief economist, noted that uncertainty ahead of the 30 October Budget had dampened activity, as both businesses and consumers reduced spending.
However, the ONS pointed out that certain industries, such as real estate, law firms, and accountancy, had expedited work ahead of Chancellor Reeves’ Budget announcement.
