UK ECONOMY SHRINKS – Economy contracts 0.1% in October as weak data boosts rate-cut expectations
The UK economy shrank unexpectedly in the run-up to the Budget, contracting 0.1% in October, according to new figures from the Office for National Statistics. Economists had forecast slight growth.
A cyber-attack at Jaguar Land Rover continued to drag on car production, while analysts say uncertainty ahead of the Budget slowed both consumer and business spending. The wider economy also fell 0.1% over the three months to October.
The weaker data has strengthened expectations that the Bank of England could cut interest rates next week.
A Treasury spokesperson said the government is focused on boosting growth through lower energy bills and major infrastructure investment. But Shadow Chancellor Mel Stride blamed the Budget for the contraction, calling it “a direct result of Labour’s economic mismanagement.”
Economists warn that the economy has grown in only one of the past seven months. Vehicle manufacturing remains far below pre-attack levels, and the ONS says the services sector recorded no growth over three months.
