UK GDP Falls 0.1% in October Amid Production and Services Slowdown
The UK economy contracted by 0.1% in October and over the three months to October, contrary to expectations of growth, according to data from the Office for National Statistics (ONS). Vehicle manufacturing was a significant factor in the three-month production decline of 17.7%, influenced by disruptions at Jaguar Land Rover. Although total production rose 1.1% in October due to some recovery in vehicle manufacturing, output remained well below levels seen in August.
The services sector, representing about three-quarters of GDP, showed no growth during the three-month period leading to October. The monthly GDP figures exhibit more volatility compared to the rolling three-month measure, making the economic downturn more difficult to interpret.
Analysts suggest that the weaker economic data could strengthen the argument for the Bank of England to cut interest rates at its upcoming meeting. The Treasury emphasized ongoing efforts to stimulate growth through reduced energy bills and increased infrastructure investment. In contrast, opposition parties criticized the recent Budget for contributing to the economic contraction. Private sector indicators included Card Factory lowering its profit forecast due to weakened sales, while economists noted that uncertainty ahead of the Budget may have suppressed consumer spending.
