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On Friday, the Labour government’s mission for economic growth proved to be not just sluggish but in free fall.
The latest figures published by the Office for National Statistics (ONS) dealt another blow to Rachel Reeves as new data showed production output shrank 0.5 per cent in October whilst construction contracted 0.3 per cent.
The all-important services sector, which is estimated to make up over 80 per cent of the economy, did not grow at all.
This led to a headline 0.1 per cent contraction in the economy.
Economists quickly sounded the alarm with a number warning the UK was on “recession watch”.
Those at Deutsche Bank believes that Britain’s stuttering services sector – often viewed as the engine room of the UK economy – and the slower than expected recovery in auto making after the JLR cyberattack, makes a quarterly contraction likely.
Neil Birrell, chief investment officer at Premier Miton Investors, said the figures should encourage a dovish cut from the Bank of England on Thursday, when the Monetary Policy Committee makes their next interest rates decision.
“It’s time to worry about recession, not inflation,” Birrell said.
The latest reading for inflation sat at 3.6 per cent, falling slightly from 3.8 per cent though remaining well above the Bank’s two per cent target. The next set of data will be due on Wednesday, following unemployment figures on Tuesday.
We’ll be bringing you the biggest news and analysis of the day as we get it.
Here’s a few of our top stories from the last few days
UK on ‘recession watch’ as economy contracts amid Budget chaos
Bank of England faces pressure to cut rates
Labour must unite behind Starmer or risk losses to Reform, deputy leader says
‘Petrified’ publicans call on government for urgent support
Next eyes Russell & Bromley deal