UK Economy Shrinks For Second Month In A Row, Dealing A Blow To Rachel Reeves

Britain’s Chancellor of the Exchequer Rachel Reeves speaks with the media as she arrives for a meeting of eurogroup finance ministers at the European Council building in Brussels.

The UK economy unexpectedly shrunk again in October in a huge blow for Rachel Reeves.

Figures released on Friday morning by the Office for National Statistics showed gross domestic product (GDP) fell by 0.1%, just as it had done in September.

Labour has made growing the economy its number one priority.

But the ONS data showed the construction sector shrank by 0.4% and the production sector fell by 0.6%.

Reeves said: “We are determined to deliver economic growth as higher growth means increased living standards for everyone, everywhere. This is what our plan for change is all about.

“While the figures this month are disappointing, we have put in place policies to deliver long term economic growth.

“We have put public finances back on a stable footing, capped the rate of corporation tax at the lowest level in the G7, established a £70 billion national wealth fund to drive growth in our towns and cities, launched a 10 year infrastructure strategy and are creating pension mega funds to boost investment in British businesses, infrastructure and clean energy.”

GDP fell 0.1% in October 2024. Services showed no growth, while Production (-0.6%) and construction (-0.4%) both fell.

Read the full release ➡️ https://t.co/xHSGkRpgGz pic.twitter.com/IfK4LPeJrw

— Office for National Statistics (ONS) (@ONS) December 13, 2024

Shadow chancellor Mel Stride said: “It is no wonder businesses are sounding the alarm. This fall in growth shows the stark impact of the Chancellor’s decisions and continually talking down the economy.

“Labour were left the fastest growing economy in the G7 but because of their decisions growth is now under serious pressure. The impact will be felt by families through higher taxes, fewer jobs, higher prices and higher interest rates.”

Lib Dem Treasury spokesperson Daisy Cooper said: “This unexpected fall in GDP shows why it’s so disappointing that the Budget missed so many opportunities and made so many self-defeating decisions.

“Small businesses are the engine of our economy and drive growth. Yet this government has decided to burden them with more costs.

“If the government wants to turn these figures around then they should realise their mistake and reverse their NICs hike on small business.”