The UK economy shrank unexpectedly in the lead up to the Budget, according to the latest official figures.
The economy contracted by 0.1% in October, the Office for National Statistics (ONS) said, whereas economists had been expecting it to grow by 0.1%. The economy also shrank by 0.1% in the three months to October.
Stuart Morrison, Research Manager at the British Chambers of Commerce, said: “There’s little festive cheer for businesses in the latest GDP data, as the economy unexpectedly shrank in both the three-month period and October itself. Firms are left waiting for an unlikely Christmas miracle on growth.
“The data paints a particularly worrying picture on the services sector, which is usually a real strength of the UK economy.
“The BCC’s latest economic forecast, published yesterday, shows 2026 will be another challenging year with limited growth, low levels of business investment, exports slowing and rising unemployment.
“The Budget didn’t hit all firms with another general tax hike, but the Chancellor’s statement was a missed opportunity on growth levers.
“Next year must be the moment the Government works with business to unlock growth, with a particular focus on both boosting trade and helping firms embrace AI. It’s also crucial that the welcome ideas in the recent industrial, trade and infrastructure strategies are delivered, rather than just remaining words on a page.”
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