UK Economy Contracts Again: GDP Falls 0.1% in October 2025

Official data shows the UK economy shrank by 0.1% in October, marking another unexpected downturn. The slight fall in gross domestic product (GDP) follows a similar 0.1% decline in September and no growth in August.

Economists surveyed by Reuters had forecast a 0.1% rise, making October’s performance worse than anticipated.

The latest figures from the Office for National Statistics (ONS) add further pressure on the chancellor, reflecting ongoing weakness in the economy. Analysts had warned that consumer spending would likely slow ahead of November’s budget due to uncertainty over measures expected from Rachel Reeves, which may affect both households and businesses.

A cyber attack on Jaguar Land Rover also significantly disrupted car manufacturing, contributing to the decline. According to the ONS, the services sector fell by 0.3% in October and construction dropped by 0.6%, though production rose by 1.1%. On a rolling three-month basis to October, GDP also decreased by 0.1%.

Liz McKeown, the ONS’s director of economic statistics, said car manufacturing remained weak despite only a small rebound from September’s steep drop. She noted that the services sector showed no growth over the past three months, with declines in wholesale activity and scientific research partly offset by gains in retail, rental, and leasing.

Rate cut expected

Experts also suggested that leaks and speculation ahead of the budget discouraged both consumers and businesses from spending.

JP Morgan’s Scott Gardner said that despite forecasts of growth, the UK continues to struggle with “inconsistent productivity”, adding that budget rumours had a “numbing effect” on economic activity.

Suren Thiru of the Institute of Chartered Accountants said the figures increased the chances of the Bank of England cutting interest rates next week. He noted that the results would heighten concerns about the economy’s health and that the budget’s expected deflationary impact makes a December rate cut “nailed on”.

‘Extremely concerning’ numbers

PwC chief economist Barret Kupelian said that although the Jaguar Land Rover cyber attack played a role, the bigger issue was that uncertainty surrounding the autumn budget put consumers and businesses into “wait-and-see mode”. He added that November’s GDP is also likely to be weak, with any improvement coming only after the budget’s effects begin to materialize.

Sir Mel Stride, the Conservative shadow chancellor, called the figures “extremely concerning” and blamed them on “Labour’s economic mismanagement”.

A Treasury spokesperson responded by saying the government remains committed to beating economic forecasts, creating jobs, and investing in stronger public services.