The latest figures from the Office for National Statistics (ONS) show that the economy shrank by 0.3% in October, a reversal from the 0.2% growth observed in September.
Economic growth hit a plateau in the three months leading up to October 2023, with no overall growth compared to the previous three months ending in July 2023.
The services sector, which often plays a crucial role in driving GDP, declined by 0.2% in October, primarily due to decreases in information and communication. This downturn follows a growth of 0.2% in the sector during September.
In the production sector, there was a more significant decrease of 0.8% in October, attributed to widespread declines across manufacturing industries. This contrasts with the sector’s performance in September, where it showed no growth.
The construction sector also experienced a downturn, falling by 0.5% in October after previously recording a growth of 0.4% in September.
Reaction
Charles Breen, founder & director at Montgomery Financial:
“The first half of the year was an absolute car crash as Liz Truss and her pyrotechnics brigade eviscerated consumer confidence and pulled the rug from under the property and mortgage market.
“However, in the second half of the year, activity levels have jumped considerably, and our business levels have ended up matching last year.
“We are now in a very strong position going into 2024 and beyond. We are getting a lot of first-time buyers who are exploring their options and putting everything in place for setting out on the journey to homeownership next year.
“We have also seen a marked uptick in debt consolidation enquiries, as people are trying to cut costs, especially on high-interest credit card debt that they have accrued over many years of record low-interest rates.”
Gary Bush, financial adviser at MortgageShop.com:
“2023 has been a very challenging year due to the fixed-rate mortgage chaos. Despite this, our numbers are up on 2022 and we expect to finish with a good December.
“Brokers have had to spend so much time in recent months constantly reworking clients’ cases to ensure that they complete on the most suitable rate for them. It’s been a little bit like a plumber going back to a boiler installation half a dozen times, and very time-consuming.
“We expect, or at least hope, that 2024 is going to be a much easier-to-navigate year now that fixed mortgage rates have started to show more usual signs for mortgage applicants.”
Jenny Blyth, small business owner at Storm in a Teacup Gifts:
“As 2022 came to an end, I breathed a sigh of relief that such a hard year was over. Little did I know that 2023 was going to be even harder. With rising costs throughout the year and a government that can’t see the wood for the trees, I have felt stress like I’ve never known.
“The mental health of the small business community has taken a huge hit with more closings due to a lack of custom. In a usual year, I find that September and October are my busiest months but this has now changed.
“Last year November was busy and this year people have waited until December to do their shopping.
“The public is struggling and waiting until the last minute to spend with the little they have, which in turn means my cash flow is low right up to the very end of the year, just in time to do my tax return. This isn’t a way to live and finding a second job seems to be the new norm.”
Craig Fish, director at Lodestone Mortgages & Protection:
“Surprisingly business has been on par with 2022, which is welcome, but most of that business was done in the first two-thirds of the year. The last third has been abnormally quiet, though is now starting to pick up.
“The biggest challenges are a significant drop off in buy-to-let, and people wanting to move home, resulting in the property market coming to a standstill. This renewed interest, along with the expectation that rates will continue to drop, and that base will also drop next year, all give me hope that 2024 will be at least as good as this year, but hopefully better.”
Jamie Thompson, mortgage broker at Jamie Thompson Mortgages:
“This year has been the best yet for my one-man band mortgage business. Despite all the doomsayers around the housing market in the UK, mortgage brokers offering great service seem to do well. That probably extends to most industries.
“With interest rates falling and buyers now confident they can secure houses below asking price, I don’t see why 2024 shouldn’t build further on 2023. I’ve seen many of my young clients have significant pay increases over the past three years, way beyond inflation so the idea that everyone is suffering is not true.”
Adam Smith, founder at Alfa Mortgages:
“Things have been ramping up every week in recent months, and honestly, we’re still swamped. With inflation on the decline, lenders cutting rates, and house prices taking a dip, we’re sensing the market is heating up and will be ablaze come January.”
Kerri-Ann Hargreaves, director – IronMarket Talent at Net-Worth NTWRK:
“The main challenge we have found as a recruitment business is navigating how to support businesses contending with escalating salaries and benefits, along with a heightened demand for flexible working arrangements. The current job market is robust. Within the finance and accountancy and engineering sectors, businesses have continued to hire in preparation for the start of 2024 or, in most cases, before the end of the year.”
Graham Loosley, partner at Mercian Accountants Ltd:
“2023 has been a year of turning setbacks into comebacks. Despite the headwinds posed by the pandemic, our accounting firm managed to not only stay afloat but also thrive. We’ve focused on innovation and client-centric solutions, which have been crucial in these times.
“Our resilience was further recognised when we were invited to join the Handpicked Accountants portfolio, a part of the Begbies Traynor Group.
“This accolade, highlighting our commercial expertise and strong client relationships, has been a feather in our cap. Our client base grew remarkably this year, diversifying across various sectors and enhancing our industry expertise.
“The pandemic’s impact led to the temporary closure of our PR company, but in 2023, we successfully reopened it, marking a significant stride in our business journey. Looking to 2024, we’re optimistic.
“The revival of our PR venture and our expanding, diverse client base are the driving forces behind our confidence in continued growth and success.”
