Britain's Economy Faces Consecutive Contraction Ahead of New Budget

Britain's economy shrank for two consecutive months leading to the government’s new budget, marking the first back-to-back GDP declines since the COVID-19 pandemic began. Economists had expected growth, but GDP fell by 0.1% in October. Reeves' impending budget announcement caused mixed business activity.

In a notable economic downturn, Britain's economy contracted for the second consecutive month in October, ahead of the government's anticipated budget announcement. GDP fell by 0.1% month-on-month, mirroring September's contraction, marking the first back-to-back declines since the initial COVID-19 pandemic lockdowns, according to the Office for National Statistics.

Economists had forecasted a slight economic expansion of 0.1%, but the latest data contradicted those expectations. The confusion among businesses about the impending budget, which proposed significant tax increases, contributed to stagnant or declining turnover for many, as reported by the ONS.

The economic data, released as Chancellor Rachel Reeves prepares the budget, showcased stagnation across the services sector and declines in manufacturing and construction output. While the figures disappointed, Reeves expressed confidence in long-term growth strategies, despite the present challenges.

(With inputs from agencies.)