The UK economy shrank again in October; GDP fell 0.1% m/m Bi Investing.com

Investing.com – The UK economy shrank again in October, with economic activity in the world’s sixth-largest economy remaining very muted, pointing to further interest rate cuts by the Bank of England in 2025.

Data released earlier on Friday by the Office for National Statistics showed that it fell by 0.1 percent in October, matching the previous month, resulting in an annual growth rate of 1.3 percent.

This was much weaker than expected, as October GDP was expected to rise 0.1% in October, an annual increase of 1.6%.

They cut interest rates last month by 25 basis points, cutting the key rate to 4.75% from 5%, continuing a recent trend of lower borrowing costs after rates hit a 16-year high.

The result points to another easing of monetary policy next week, but the Bank of England also has to contend with the new Labor government’s first budget which saw a dramatic increase in borrowing as well as tax hikes.

In the UK, they increased by 0.1% in the third quarter of 2024 compared to the previous quarter. This was slower than the 0.5% increase in the second quarter.

The International Monetary Fund predicts that the UK will grow by 1.1 per cent in 2024, which is slower than in previous periods, but would put the UK in the middle of the world’s leading countries.