Following a contraction of 0.6% in September that was largely attributed to the disruption of routine activities caused by the Queen’s funeral bank holiday, the Office for National Statistics (ONS) recorded growth of 0.5%.
The return to normality of working days rather than any actual increase in output is largely responsible for October’s partial rebound, which was slightly stronger than economists had anticipated.
The ONS identified the major growth as coming from wholesale and retail activities, both of which were adversely impacted by closures made in memory of the late Queen.
As a result, experts continue to predict that a recession will be officially declared by the year’s end.
This is due to the forecast that output will be negative for the entire current fourth quarter, following the 0.2% decline for the third quarter to September.
Both the Bank of England and the Office for Budget Responsibility, which have already stated that they think the UK is in a recession, anticipate that the slump will continue into 2023 but will be brief.
High inflation, caused in part by Russia’s war in Ukraine, has hindered economic growth by reducing consumer demand.
The Bank has increased the interest rate in an effort to control inflation, which has increased borrowing rates that have further reduced demand.
Additionally, fixed rate mortgages have not yet decreased to the levels seen before the infamous September ‘mini-budget’, which caused financial markets to tremble at the government’s then Liz Truss-led expenditure plans.
In response to the most recent growth figures, the new chancellor Jeremy Hunt, who has since backed off on growth measures, said: “High inflation, exacerbated by Putin’s illegal war, is slowing growth across the world, with the IMF predicting a third of the world economy will be in recession this year or next.