Britain's Economic Forecast: Between Contractions and Growth

The UK's economy experienced its first consecutive monthly GDP declines since the COVID-19 pandemic, with a 0.1% contraction in October. While manufacturing and construction output fell, the services sector stagnated. Finance Minister Rachel Reeves' budget, with tax hikes and increased public spending, aims to drive long-term growth.

Britain's economy contracted for the second consecutive month in October, preparing for the new government's initial budget. This marked the first back-to-back GDP declines since early pandemic lockdowns in 2020, according to the Office for National Statistics.

The services sector showed no growth, while manufacturing and construction saw decreased output. Despite projections of a slight GDP increase, recent data reveal a bleak economic picture, echoed by stagnant retail sales and business surveys.

The finance minister's recent budget, which elevates business taxes while boosting investment in public services, is poised to influence future GDP. Meanwhile, economic concerns are compounded by falling trade figures and sterling's decline, with BoE interest rate cuts speculated but uncertain.

(With inputs from agencies.)