The UK economy contracted for the second consecutive month in October, fuelling concerns of a recession under Chancellor Rachel Reeves. GDP fell by 0.1%, mirroring September’s decline. Economists predicted better figures, but a drop in production and construction output drove the contraction. Quarterly growth slowed to just 0.1%, a sharp decline from 0.7% in the year’s first quarter.
The production sector reported a 0.6% downturn in October, with manufacturing and mining leading a two-month slump totalling 1.1%. Construction output also fell by 0.5% over the past two months despite recording 0.4% quarterly growth thanks to a 1.7% increase in new projects.
Meanwhile, the accounting industry bucked the trend with a 13% growth in October, reaching £4.29bn – a notable 11% rise compared to October 2023. The wider services sector, however, stagnated, with gains in seven subsectors offset by declines in six others. Consumer-facing industries, including hospitality, saw a sharp 0.6% decline in October, contributing to a 1% drop over two months.
The weak GDP figures follow a challenging October Budget, which included a 1.2% rise in employers’ national insurance from April 2025 and the anticipated Employment Rights Bill, likely to increase business costs. Reeves called the results “disappointing” as they clash with the government’s renewed growth mission.
These grim statistics mark a pivotal moment for policymakers. The UK economy struggles while select industries, like accountancy, remain resilient.
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