Latest GDP decline follows a similar drop in the previous month
The UK economy contracted by 0.1% in October, according to the latest figures from the Office for National Statistics (ONS), following a similar 0.1% decline in September.
The dip in real gross domestic product (GDP) was driven primarily by a drop in production output, countering expectations from economists polled by Reuters, who had predicted 0.1% growth for the month.
Despite the monthly decline, GDP grew by 0.1% in the three months to October 2024 compared to the previous three-month period ending in July, buoyed by gains in the services and construction sectors.
The services sector, which accounts for the largest portion of the economy, showed no growth in October or September. However, it expanded by 0.1% over the three-month period.
Production output fell by 0.6% in October, with declines in manufacturing and mining and quarrying activity contributing to the drop. This follows a 0.5% decrease in September. Over the three months to October, production output declined by 0.3%.
The construction sector experienced a 0.4% decline in October, reversing modest growth of 0.1% in September. However, the sector expanded by 0.4% in the three months to October.
GDP fell 0.1% in October 2024. Services showed no growth, while Production (-0.6%) and construction (-0.4%) both fell.
— Office for National Statistics (ONS) (@ONS) December 13, 2024
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“The economy contracted slightly in October, with services showing no growth overall and production and construction both falling,” said Liz McKeown, ONS director of economic statistics, commenting on the latest GDP figures.
“Oil and gas extraction, pubs and restaurants and retail all had weak months, partially offset by growth in telecoms, logistics, and legal firms.
“However, the economy still grew a little over the last three months as a whole.”
The weak performance poses a challenge for the new Labour government, which came to power in July with a pledge to deliver the highest sustained growth in the G7. Chancellor Rachel Reeves acknowledged the disappointing data but reaffirmed the government’s commitment to economic growth.
“We are determined to deliver economic growth as higher growth means increased living standards for everyone, everywhere,” she told the Financial Times. “While the figures this month are disappointing, we have put in place policies to deliver long-term economic growth.”
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