The United Kingdom’s economy contracted by 0.1% in October 2025, surprising analysts who had expected flat growth, according to official data from the Office for National Statistics. The dip follows a similar 0.1% decline in September and leaves overall output stagnant, with only one month of expansion in the past seven.
The fall was broad-based, with construction dropping and the dominant services sector failing to grow. Production did see a modest increase, helped by a partial rebound in manufacturing after disruptions earlier in the year, but it was not enough to offset weakness elsewhere.
Economists and business groups have linked the subdued performance to uncertainty ahead of Chancellor Rachel Reeves’s budget and a cautious outlook among companies and households that has restrained investment and spending. The dampened mood in the run-up to fiscal announcements is thought to have held back activity across sectors including retail, real estate and business services.
October’s contraction also comes against the backdrop of an earlier major cyberattack on Jaguar Land Rover, which sharply reduced car production and contributed to earlier monthly weakness. Although some manufacturing output has returned, the lingering effects of the disruption continue to weigh on broader economic momentum.
Financial markets reacted to the weaker data, with the British pound slipping against major currencies and investors increasingly pricing in a possible interest rate cut by the Bank of England at its next meeting to support growth.
