People shop on Oxford Street in London, Britain April 10, 2023. Photographer Anna Gordon/File Photo
By Reuters
Britain’s economy shrank in October, official data showed on Wednesday, a day before the Bank of England is expected to keep interest rates at a 15-year high to curb still-high inflation despite the toll they are taking on growth.
Gross domestic product (GDP) fell by 0.3% from September, the Office for National Statistics said.
A Reuters poll of economists had pointed to no change in GDP.
It was the first time since July that GDP had shrunk on a month-by-month basis.
In the three months to October, GDP flat-lined, the ONS said, weaker than the Reuters poll forecast of a 0.1% increase.
Britain’s economy avoided a contraction in the July-to-September period – when it also showed no change – but some analysts think it remains at risk of a shallow recession in late 2023 and early 2024 after the BoE’s increases in interest rates.
The central bank is widely expected to keep Bank Rate at 5.25% on Thursday and signal once again that it is not close to cutting them.
The ONS data on Wednesday showed Britain’s dominant services sector shrank by 0.2% in October while manufacturing and construction contracted by 1.1% and 0.5% respectively.