The UK Economy Suffers First Back-To-Back Declines Since 2020

• Britain's economy shrank for a second month in a row in October in the run-up to the government's first budget, the first back-to-back falls in output since the onset of the COVID-19 pandemic, and a setback for new finance minister Rachel Reeves.
• Gross domestic product (GDP) contracted by 0.1% month-on-month in October, as it did in September, the Office for National Statistics said. It was the first consecutive drop in monthly GDP - which is volatile and prone to revision - since March and April 2020, when Britain enforced its first coronavirus lockdown.
• Economists polled by Reuters had forecasted a monthly expansion of 0.1%. The ONS said there was "mixed" anecdotal evidence from companies that turnover had been affected by companies waiting for the budget statement, which imposed large tax rises on businesses. Others brought forward activity.
• The services sector flatlined, while output in the manufacturing and construction industries declined in October's data, which measured the economy in the weeks before Reeves' budget statement on Oct. 30.
• Reeves and Prime Minister Keir Starmer warned that the budget would include painful tax increases. The data adds to a run of worse-than-expected figures for Britain’s economy, with business surveys and retail sales readings also falling flat.
• “While the figures this month are disappointing, we have put in place policies to deliver long-term economic growth,” Reeves said in a statement.

(Sources: Reuters & GDN Online)