UK economy shrinks for second month in a row

13 Dec 2024

The UK economy shrank for the second month in a row in October, according to the Office for National Statistics (ONS).

Official figures showed a 0.1% drop in gross domestic product (GDP) for October. The economy had been expected to return to growth following a fall during September.

However, the ONS said that activity had stalled or declined, with pubs, restaurants and retail among the sectors reporting 'weak months'.

David Bharier, Head of Research at the British Chambers of Commerce (BCC), said: 'With growth of just 0.1% in the three months to October and an unexpected fall in the monthly GDP, the UK economy was already fragile ahead of recent policy announcements.

'The full impact of the Budget since then is yet to be seen. However, our research has already shown a spike in anxiety over tax and employment policy. Many businesses are telling us that increased costs are likely to have an impact on their investment and recruitment plans. Firms of all shapes and sizes are facing tough decisions in early 2025.

'The Industrial Strategy due in the Spring has the potential to boost business growth for the long-term. Companies are also eager to see government plans on business rates reform, trade and infrastructure.

'Getting sustained economic growth will only be possible if the environment is right for businesses to invest, recruit and export.'