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A recovery in the manufacturing sector, led by Jaguar Land Rover’s (JLR) recovery, could accelerate economic growth in October.Budget Economists believe that pressure on businesses is increasing.
Official figures will show estimates of UK gross domestic product (GDP) on Friday 12 December.
Some businesses indicated activity in the economy slowed ahead of the budget presented on November 26, as speculation increased over potential tax measures.
But economists believe improvements in the manufacturing sector could help boost overall growth.
gross domestic product Declined 0.1% in September National Statistical Office (ONS) reports that the “significant decline” in car production during the month reflects the impact of the cyber attack on JLR.
The carmaker 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 recoveries.
“Given that production gradually resumed from mid-October, there is likely to be a partial recovery in manufacturing output that month,” Andrew Goodwin, chief UK economist. oxford economicsSaid.
They expect October to be a flat month for the services sector with GDP growth of 0.1%.
Investec economists are forecasting slightly larger growth of 0.2% for the month, which it said is “consistent with our view that the economy will expand overall by closer to 1.5% in 2025”.
The next dataset will be closely watched for any signs of impact of the uncertainty ahead of the Budget on overall activity.
Former Chief Economist of the Bank of England andy haldane It said last month that speculation was partly responsible for the data being weaker than economists expected for the third quarter.
He said long-standing concerns about the budget and leaks about potential tax increases “have caused frustration among businesses and consumers.”
Business surveys also suggested that companies were postponing spending until after the Budget and there was some hesitation among households about large purchases.
However, according to an influential survey by S&P Global, activity in the private sector increased in October with the return of growth in the manufacturing sector.