Britain's economy shrank unexpectedly during the three months to October, according to official figures today that are likely to boost expectations for Bank of England interest rate cuts.
The Office for National Statistics (ONS) said gross domestic product contracted by 0.1% in the August-to-October period. Economists polled by Reuters had forecast a flat reading.
In October alone, the economy contracted by 0.1%, against forecasts for a 0.1% rise. While single-month GDP figures are volatile and prone to revision, today's data means the UK economy has no't grown since June.
That underlined the tough economic backdrop that finance minister Rachel Reeves faced when she readied a big tax-raising budget that she announced on November 26.
Today's data showed unexpectedly sharp declines in the dominant services sector as well as construction.
The figures also cast doubt on the Bank of England's expectation that the economy will grow around 0.3% in the fourth quarter as a whole.
Investors on Thursday had assigned a roughly 90% chance of a Bank of England interest rate cut on December 18.
Manufacturing output, impaired in September by a cyber attack on Jaguar Land Rover, failed to recover as economists had hoped.
The ONS said retailers in particular had a bad month, part of the reason why services output contracted by 0.3% in October against forecasts for a flat reading.
In response to the data, the UK finance ministry said it was determined to defy the forecasts on growth and create good jobs.
Compared with a year earlier, economic output was 1.1% higher in October, the ONS said, weaker than the 1.4% expansion forecast by economists.
