UK GDP fell 0.3% in October, following 0.2% growth in September and GDP was flat over the three months to October.
The economic contraction reflects a 0.2% fall in the services sector, particularly in information and communication activity driven by weaker computer programming activity and a slowdown in film activity.
Consumer Services fell 0.1% month-on-month, construction output fell 0.5% month-on-month whilst production fell 0.8% month-on-month, GDP had been expected to be flat month-on-month (Trading Economics).
Nicholas Hyett, Investment Analyst, Wealth Club said, “With the Bank of England expecting to leave interest rates unchanged on Thursday, this is shaping up to be a flatline festive period. GDP has gone nowhere over a three month period, as a bleak October offset some more positive numbers from the end of the summer.
“While the crucial services sector has been negatively affected by US actor strikes, which is a bit of a one-off, the rest of the GDP report paints a gloomy picture.
“Manufacturing is down nearly 1% and house building activity has fallen nearly 5%. With labour markets also showing signs of weakness, another interest rate hike is looking increasingly unlikely.
“The question now is when the Bank starts cutting rates. Leave it too long and the cure could yet prove worse than the disease . . . who would want to be a central banker.”