UK economy shrinks for second month running in October, new figures show

The UK economy contracted for a second month in October, defying expectations of a rebound as car manufacturing saw only a slight recovery following the cyber attack on Jaguar Land Rover.

The Office for National Statistics (ONS) said gross domestic product (GDP) fell 0.1% in October, following a 0.1% decline in September.

Most economists were expecting a rise of 0.1% for October on hopes of a manufacturing bounceback led by Jaguar Land Rover’s (JLR) recovery from a major hack.

The cyber attack disrupted JLR’s operations, and although manufacturing improved a little afterwards, it wasn’t enough to boost the overall economy.

The UK economy has not grown since June, with GDP either flat or falling in the past four months, new data shows.

Many businesses have recently suggested that activity in the economy slowed in the lead-up to the November Budget, as speculation over possible tax measures grew.

A Treasury spokesperson said: “We are determined to defy the forecasts on growth and create good jobs, so everyone is better off, while also helping us invest in better public services.

“That is why the Chancellor is taking £150 off energy bills, protecting record investment in our infrastructure, and we are backing major planning reforms, the expansion of Heathrow and Gatwick airports, and the construction of Sizewell C.”

Commenting on today’s GDP figures, Liz McKeown, Director of Economic Statistics at the ONS, said: “The economy contracted slightly in the latest three months, as production fell again and services growth stalled.

“Within production, there was continued weakness in car manufacturing, with the industry only making a slight recovery in October from the substantial fall in output seen in the previous month.

“Overall services showed no growth in the latest three months, continuing the recent trend of slowing in this sector. There were falls in wholesale and scientific research, offset by growth in rental and leasing and retail.”