Britain’s economy contracted for the second consecutive month in October

Britain’s economy contracted for the second consecutive month in October, defying hopes of a comeback as car manufacturing made only a modest recovery from the Jaguar Land Recovery cyber attack.

National Statistical Office (ONS) said gross domestic product (GDP) fell 0.1% in October after falling 0.1% in September.

Most economists were expecting a 0.1% rise in October on the back of a rebound in manufacturing as Jaguar Land Rover (JLR) recovers from a big hack.

The UK economy has not grown since June, with gross domestic product either flat or falling over the past four months, data shows.

Many businesses have recently indicated that activity in the economy has slowed. BudgetDelivered on 26 November, as speculation increased over potential tax measures.

The economy shrank 0.1% in the three months to October after growing 0.1% in the three months to September.

Liz McKeown, ONS director of economic statistics, said: “The economy has slowed slightly over the past three months, as output has fallen again and services growth has stalled.

“Within production, weakness in car manufacturing continued, with the industry making only a modest recovery in October from the substantial decline in output seen in the previous month.

“Overall services saw no growth over the past three months, continuing the recent recessionary trend in the sector.”

The data showed car production activity rose 9.5% month-on-month in October, but this was only a partial recovery from a 28.6% decline in September as the JLR cyber attack shocked the sector.

Car production activity was down 21.8% compared to August.

JLR was forced to halt production of its cars for more than a month after it was targeted by hackers, which had a knock-on effect across the wider sector and resulted in costly recovery.

Its production gradually resumed by October.

Budget speculation added to JLR’s woes, with output in the core services sector falling 0.3% and the construction sector falling 0.6%, experts said.

Barrett Kupelian, Chief Economist pwcSaid: “Some of this weakness still reflects the cyber attack on Jaguar Land Rover, which caused a decline in car production at the beginning of the autumn, but the bigger story is that speculation around the autumn budget kept households and businesses in a wait-and-see mode.

“Given the timing of the Budget, the November GDP print is likely to look similarly slow before any impact is visible post-Budget.”

A treasure The spokesperson said: “We are committed to defying growth forecasts and creating good jobs so everyone is better off, while also helping us invest in better public services.”