UK economy unexpectedly shrank in October in fresh blow for Rachel Reeves

The UK economy shrank by 0.1 percent in October, dealing a fresh blow to embattled Chancellor Rachel Reeves.

The Office for National Statistics (ONS) published its latest GDP figures for October on Friday morning, revealing that the economy has not grown since June.

ONS director of economic statistics Liz McKeown said: “Within manufacturing, weakness continued in car production, with the sector recording only a slight recovery in October from the significant production decline seen in the previous month.”

Most economists expected to see a 0.1 percent increase in October and predicted that Jaguar Land Rover’s cyberattack recovery would lead to a rebound in output.

Rising GDP indicates economic growth, which is generally welcome news for the country’s companies, households and politicians. When GDP falls, it means the economy is shrinking.

If it falls for two consecutive quarters, the country is considered to be in a recession, which could affect wages and employment.

Rachel Reeves and the Government were hopeful that stronger economic growth could help boost tax revenues and support Government spending plans.

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

“That’s why the Chancellor is cutting energy bills by £150, maintaining record investment in our infrastructure, and we support major planning reforms, the expansion of Heathrow and Gatwick airports and the construction of Sizewell C.”

More to follow…