UK economy shrank by more than expected in October

UK economy shrank by more than expected in October

In October, the UK economy contracted more than anticipated, with growth hampered by elevated interest rates and adverse weather conditions. 

The Gross Domestic Product (GDP) declined by 0.3% compared to the 0.2% growth observed in September.

 The Bank of England, in its efforts to combat inflation, has implemented rate hikes, leading to a tightening of household spending. 

The next rate decision is scheduled for Thursday.

 Additionally, severe weather, particularly from Storm Babet, affected construction and tourism during October. 

Most economists had predicted that the economy would fall by just 0.1% that month.

The Office for National Statistics‘ Darren Morgan said: “Services were the biggest driver of the fall with drops in IT, legal firms and film production – which fell back after a couple of strong months.

“These were also compounded by widespread falls in manufacturing and construction, which fell partly due to the poor weather”, such as the severe winds and flooding seen during Storm Babet.