POLL OF THE DAY: Will Labour's economic policy avoid recession? VOTE NOW
POLL OF THE DAY: Will Labour's economic policy avoid recession? VOTE NOW
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New data from the Office of National Statistics (ONS) has found the UK economy unexpectedly contracted in October, marking two months in a row of negative growth for the first time since the pandemic.
Chancellor Rachel Reeves said the data was “disappointing” as she said the Government was hoping to grow the economy with families “feeling better off with more money in their pockets”.
The ONS said gross domestic product (GDP) contracted 0.1 per cent in October.
The data showed a weak month for pubs and restaurants dragged on growth amid some uncertainty before the autumn Budget.
Most economists had been expecting GDP to rise by 0.1% during the month.
Rachel Reeves at Darwen Market during a visit to Darwen, Lancashire
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The latest figures from the ONS follow a 0.1 per cent estimated fall in September – meaning it is the first time the economy has contracted for two consecutive months since March and April 2020, during the onset of the Covid-19 pandemic.
Chancellor Rachel Reeves said she hopes GDP will start to improve as the Government targets economic growth.
“The numbers on today’s GDP are disappointing, but it’s not possible to turn around more than a decade of poor economic growth and stagnant living standards in just a few months,” Reeves said.
She said the Government was “getting on with the job of improving economic growth and driving up living standards”.
“Growth is the number one mission of this Government – economic growth that results in families feeling better off with more money in their pockets – and we’re driving that economic growth and we hope that those numbers will start to improve because of the policies that we’re pursuing in the months ahead.”
LATEST DEVELOPMENTS:Liz McKeown, the ONS’s director of economic statistics, said: “The economy contracted slightly in October, with services showing no growth overall and production and construction both falling.
“Oil and gas extraction, pubs and restaurants and retail all had weak months, partially offset by growth in telecoms, logistics, and legal firms.
“However, the economy still grew a little over the last three months as a whole.”
The ONS’s monthly business survey showed signs of a mixed response ahead of the autumn Budget announcement at the end of the month.
Some industries, like manufacturers, retailers and recruiters, said turnover was affected as they waited for the outcome of the tax-setting statement.
Rachel Reeves said the data was 'disappointing'
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Taking a swipe at the Chancellor following the release of the data, Opposition leader Kemi Badenoch said: “I think it shows that the Prime Minister and the Chancellor have been making the wrong choices.
“They inherited an economy that was growing and now it is shrinking.
“Their Budget is crashing the economy and they need to reverse this.”
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