UK economy bounces back in October, but shrinks overall as recessions looms- ONS

The UK economy shrank between July and September, but rebounded slightly in October as the UK heads into an expected recession.

The UK’s economy rebounded in October after a contraction in September when output was impacted by the extra bank holiday for the Queen’s funeral, according to official figures.

The Office for National Statistics (ONS) said gross domestic product (GDP) grew by a bigger-than-expected 0.5 per cent between September and October in a bounce back from a 0.6 per cent contraction the previous month.

The ONS stated the economy contracted by 0.3 per cent during the July to September as soaring prices hit businesses and households.

Britain’s economy grew by 0.5% between September and October in a rebound from a 0.6% contraction the previous month, according to the Office for National Statistics.

Darren Morgan, ONS director of economic statistics, said: “The economy bounced back in October, recovering from the impact of the additional bank holiday for the state funeral.

“In particular, car sales rebounded after a very poor September, while the health sector also saw a strong month, with GP appointments, A&E attendance and the Covid-19 autumn booster campaign all driving up the sector.

“Construction continued its strong trend over the last year and stands at its highest level on record, with new housebuilding driving growth this month.

“However, over the last three months as a whole the economy shrank, with falls seen across services and manufacturing.”

Reacting to the ONS GDP figures for October, David Bharier, Head of Research at the British Chamber of Commerce (BCC) said:  “The monthly growth in GDP for October of 0.5 per cent is overshadowed by the underlying three-month trend revealed by the data, which shows a contraction in the economy of 0.3 per cent.

“As September’s figure was depressed by the Bank Holiday for the Queen’s funeral, October’s data was always likely to show a comparative improvement.

“But the BCC’s latest quarterly economic forecast expects the UK economy to be in recession for five consecutive quarters. 

“Business confidence has been falling dramatically as firms face into a wall of higher prices and energy bills, increased taxation, and rising borrowing costs.

“Unless the Government helps create a stable environment to allow businesses to invest, the UK faces a long-term loss of competitiveness.

“Businesses need to see concrete action to resolve the immediate disruptions facing the UK economy, such as soaring energy costs and the burdens in our trading relationship with Europe.”

Chancellor Jeremy Hunt said: “While today’s figures show some growth, I want to be honest that there is a tough road ahead.

“Like the rest of Europe, we are not immune from the aftershocks of Covid-19, Putin’s war and high global gas prices.

“Our plan has restored economic stability and will help drive down inflation next year, but also lay the foundations for long-term growth through continued record investment in new infrastructure, science and innovation.”

Labour’s shadow chancellor Rachel Reeves said: “Today’s numbers underline the failure of this Tory government to grow our economy, leaving us lagging behind on the global stage.

“These are challenging economic times, but there is a choice. We can continue down the road of managed decline, falling behind our competitors, or we can draw on bold thinking to propel us forward.

“That is why Labour will make our economy stronger and get it growing, with our Green Prosperity Plan and an active partnership with business.”