Monthly real gross domestic product (GDP) is estimated to have fallen by 0.1% in October 2024, according to the Office for National Statistics (ONS).
The ONS said the fall was largely because of a decline in production output; this follows a fall of 0.1% in September 2024.
Monthly services output showed no growth in October 2024 after also showing no growth in September 2024, but grew by 0.1% in the three months to October 2024.
Production output fell by 0.6% in October 2024, because of falls in manufacturing and mining and quarrying output, following a fall of 0.5% in September 2024. Production output fell by 0.3% in the three months to October 2024.
Construction output fell by 0.4% in October 2024, following growth of 0.1% in September 2024, but grew by 0.4% in the three months to October 2024.
Kevin Brown, savings specialist at Scottish Friendly, said: “The fact that the economy shrank in October is a blow for the government, whose stated central mission is to get output firing again. However, it’s unsurprising. Business confidence has soured since the Budget, which saddled employers with higher National Insurance costs that are expected to have a negative knock-on effect for the labour market.
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“It just goes to show how much of a Herculean task it will be to boost the economy, which resembles someone walking through treacle at times. Unfortunately, the outlook doesn’t look much rosier, with interest rates set to stay higher for longer and president-elect Donald Trump expected to introduce blanket tariffs on imports, both of which would act as headwinds for the UK economy.”
Danni Hewson, head of financial analysis at AJ Bell, said: “One month doesn’t tell the whole story, but when the UK economy shrinks for two months in a row, it is cause for concern.
“Think back to the last time the country experienced a double contraction, and you’ll find yourself back in the pandemic when the country was locked down for the first time and no one knew what to expect.
“This double dip is being blamed on the uncertainty created ahead of the Budget, with individuals and businesses worried about potential tax rises and unwilling to spend.
“It’s notable that bars, restaurants, arts and recreation were battered. That kind of discretionary spend is easy to cut back on if you’re concerned about what the coming months might bring.”
This article was first published on Mortgage Solutions‘ sister site, YourMoney.com. Read: UK economy in reverse gear
