Data published by the Office for National Statistics (ONS) showed that the economy contracted by 0.3% in October, offsetting the September expansion (+0.2%). Economists had expected GDP to fall by 0.1%.
Services output fell by 0.2% in October, driven by a fall in information and communication. This follows growth of 0.2% in September. Production output fell by 0.8%, driven by widespread declines in manufacturing, after showing no growth in September. Consensus estimates suggested a 0.1% reduction. The construction sector fell by 0.5% after growth of 0.4% in September. Output in consumer-facing services fell by 0.1% in October, and remains 5.0% below pre-coronavirus levels (February 2020). The largest negative contributions in October came from other personal service activities, which fell by 2.3%.
Meanwhile, from August to October, GDP did not change compared to the previous three-month period (through July). In the three months to October, there were falls in "manufacturing" (0.9%) and "electricity and gas" (0.5%). These were partially offset by rises in "mining and quarrying' (1.2%) and "water supply and sewerage" (0.1%).
In annual terms, GDP growth slowed to 0.5% from 1.3% in September. This was the weakest GDP growth in five months. Economists had expected the economy to expand by 0.6%.
GDP data were presented the day before the December meeting of the Bank of England. However, despite the shrinking economy, the Bank of England is widely expected to keep the interest rate at 5.25% and signal once again that it is not close to cutting them.