UK Economy Continues to Contract for Second Month, Defying Recovery Hopes

The UK economy continued to contract for a second consecutive month in October, highlighting persistent weakness despite earlier expectations of a modest recovery.

Official data showed that the UK economy failed to gain sufficient momentum from the limited rebound in manufacturing activity, particularly in the automotive sector.

According to the Office for National Statistics, gross domestic product declined by 0.1% in October, following an identical drop in September.

This outcome contrasted with economists’ forecasts, which had anticipated slight growth driven by Jaguar Land Rover’s recovery from a previous cyberattack.

The figures reveal that the UK economy has not recorded growth since June, with GDP remaining flat or contracting over the past four months, underscoring the fragile state of economic activity.

Meanwhile, several businesses have recently warned of slowing activity ahead of the government’s budget announcement in late November, as speculation over potential tax measures weighed on confidence across the economy.