Monthly real gross domestic product (GDP) is estimated to have fallen by 0.1% in October, largely because of a decline in production output, data from the Office for National Statistics (ONS) has found.
This minor fall also followed a decline of 0.1% in September.
Real GDP was estimated to have grown by 0.1% in the three months to October 2024, compared with the three months to July 2024, with growth in the services and construction sectors in this period.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: “The economy shrank in October – following an unrevised contraction of 0.1% in September – as the Government’s doom-mongering about the state of the public finances in the run up to the Budget dented activity.
“The surprise fall in output will be worrying for consumers and business as it puts recession chatter back on the table and signals that the final quarter may be even worse than the third when growth almost stalled.
“The economy has lost momentum since the first three months of this year when it rebounded from the technical recession seen at the end of 2023.
“The contraction in October will be concerning for the new Government as it offers a stark reflection of the hit to the economy from the uncertainty running up to the Budget, when consumers and businesses descended into a state of panic over what measures the Chancellor might deliver.
“Some of the most feared changes to personal taxation may not have materialised, but £40bn in tax rises is a lot for an economy to get to grips with particularly when businesses are expected to shoulder most of that burden.”
Isaac Stell, investment manager at Wealth Club, added: “The UK economy continued to lose momentum during October as GDP contracted by 0.1%.
“These latest figures will send a chill through the corridors of Westminster, as the Government’s growth agenda looks increasingly at risk and almost certainly opens the door to the possibility of one final rate cut before the year is out.”
