span>span>Friday 13th December 2024/span>span> - 09:22 (GMT)/span>/span>
The British economy contracted by 0.1% in October, marking the second consecutive monthly decline after a similar contraction in September. The figures, released by the Office for National Statistics (ONS), fell short of market expectations for a modest 0.1% expansion and signalled mounting headwinds for the UK’s economic outlook.
Production was the largest drag on activity, contracting by 0.6%, driven by a sharp decline in manufacturing output. Key sectors such as pharmaceuticals (-2.6%), machinery and equipment (-2.8%), and chemicals (-3.7%) saw notable slowdowns. The mining and quarrying sector also slumped 3.1% compounding the weakness, while sewerage and waste management edged down 0.2%. Utilities bucked the trend, with output rising by 1.4%.
Elsewhere, the construction sector contracted by 0.4%, while services stagnated, offering no growth overall. Gains in information and communication (0.9%), primarily telecommunications (2.8%), were offset by declines in support services (-0.8%) and employment-related activities (-2.3%).
Liz McKeown, the ONS’s director of economic statistics, highlighted the mixed picture, noting, “Oil and gas extraction, pubs and restaurants, and retail all had weak months, partially offset by growth in telecoms, logistics, and legal firms.”
The data underscores the fragile state of the UK economy as it grapples with persistent inflationary pressures, elevated borrowing costs, and ongoing industrial challenges. Sterling, already under pressure, may face renewed scrutiny as markets weigh the implications of weaker-than-expected growth. Any protracted downturn could dent investor confidence, intensifying headwinds for the pound in the months ahead.
