The UK economy is estimated to have contracted by 0.1% in October. One should not place too much weight on a single economic statistic, particularly when it relates to UK monthly GDP. Over the period from 2018 through to the end of last year, but excluding periods of lockdown, the standard deviation of the current estimate of monthly GDP growth is 0.4 percentage points, and the mean absolute revision to the initial estimate is 0.2 percentage points. Nevertheless, as we set out in our Global Outlook, Winter 2024,[1] we expect the UK economy to display little or no economic growth through the final quarter of this year and the first quarter of next, as firms and households cut their expenditure in response to tax rises announced in October. Growth should pick up through 2025 and into 2026 as increases in government spending, only partly financed through higher taxes, start to feed through.
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[1] Charts and analysis from Fathom’s Global Outlook, Winter 2024 are available in the Chartbook.
The views expressed in this article are the views of the author, not necessarily those of LSEG.
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