UK economy unexpectedly contracts in October
By Michele Maatouk
Date: Friday 13 Dec 2024
(Sharecast News) - The UK economy unexpectedly contracted in October, according to data released on Friday by the Office for National Statistics.
The economy shrank by 0.1% following a 0.1% decline in September, and versus expectations for 0.1% growth.
The figures showed that production output fell by 0.6% due to a decline in manufacturing and mining and quarrying output, following a fall of 0.5% in September.
Meanwhile, construction output was down 0.4% in October following growth of 0.1% the month before.
Liz McKeown, director of economic statistics at the ONS, said: "The economy contracted slightly in October, with services showing no growth overall and production and construction both falling.
"Oil and gas extraction, pubs and restaurants and retail all had weak months, partially offset by growth in telecoms, logistics, and legal firms. However, the economy still grew a little over the last three months as a whole."
Paul Dales, chief UK economist at Capital Economics, said: "The weak starting point for the quarter means that it is unlikely that GDP will match our 0.2% q/q Q4 forecast or the Bank of England's 0.3% q/q forecast.
"That said, with the Bank still worrying that inflation is too high, we don't think the economy is weak enough to prompt the Bank to follow November's 25bps rate cut with another cut at next Thursday's December meeting. That said, we're not as confident about that as we were before this data release."
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