UK economy rebounds by more than expected in October

The UK economy rebounded by more than expected in October, after output in September was hit by an extra bank holiday.

UK gross domestic product grew 0.5 per cent between September and October, according to data published on Monday by the Office for National Statistics.

That was faster than the 0.4 per cent expansion forecast by economists polled by Reuters, and reversed almost all the 0.6 per cent fall in September when activity fell sharply due to an extra bank holiday.

However, in the three months to October, output contracted 0.3 per cent compared with the previous three months, the largest fall since the first quarter of 2021, when the country was in a stringent lockdown.

Commenting on the GDP figures, ONS director of economic statistics Darren Morgan said: “The economy bounced back in October, recovering from the impact of the additional bank holiday for the State Funeral. However, over the past three months as a whole the economy shrank, with falls seen across services and manufacturing.”

Last month, the Office for Budget Responsibility, the UK fiscal watchdog, forecast the economy would be in recession from the third quarter, when it shrank 0.2 per cent, for more than one year as high inflation and rising interest rates squeezed household incomes.

The UK economy “is set to struggle to record much growth in the months ahead”, said Sandra Horsfield, economist at Investec. She warned that consumers are set to struggle under mounting costs and that “brighter days are not set to return until 2024”.

Jeremy Hunt, the chancellor, said: “While today’s figures show some growth, I want to be honest that there is a tough road ahead. Like the rest of Europe, we are not immune from the aftershocks of Covid-19, Putin’s war and high global gas prices.”

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *