UK economy shrank in October

14 Dec 2023

The UK economy shrank by more than expected in October, with higher interest rates and bad weather taking their toll, according to the latest figures from the Office for National Statistics (ONS).

The economy shrank by 0.3% during the month after growth of 0.2% in September.

Retail and tourism were hit by severe weather in October as Storm Babet lashed the UK.

Most economists had predicted that the economy would shrink by just 0.1% that month, but the services, manufacturing and construction sectors all contracted.

Ben Jones, Lead Economist at the Confederation of British Industry (CBI), said: 'Businesses are gearing up for another tough year ahead. Faced with weak demand and ongoing pressures on costs, companies are taking a hard look at their overheads and pursuing a cautious approach to staffing levels and investment.

'With an election on the horizon, it's important to avoid adding any extra layers of uncertainty to the business environment. Seeking as much consensus as possible on growth-enhancing measures such as speeding up planning and grid connectivity or policies to encourage innovation and tech adoption would help to build confidence and unlock further investment.'