GDP grew just 0.1 per cent in October amid 'stagflation' fears
Economy was stalling even BEFORE the latest Covid crackdown as GDP grew just 0.1 per cent in October – fuelling ‘stagflation’ fears
- GDP grew just 0.1 per cent in October below the 0.4 per cent analysts expected
- Weak figure underlines the pain being caused by global supply chain chaos
- Coronavirus curbs to combat Omicron likely to deal further blow to the economy
Rishi Sunak warned of ‘bumps in the road’ today as grim figures showed the economy stalling even before the latest coronavirus crackdown.
GDP rose by just 0.1 per cent in October, lower than the 0.4 per cent analysts had expected. UK plc is still 0.5 per cent smaller than pre-pandemic levels.
The weak figures underline the pain being caused for business by global supply chain chaos that has been sending prices spiralling.
The measures imposed in a bid to control the Omicron variant are set to deal another blow to activity.
The Bank of England has warned that inflation could top 5 per cent early next year, more than double its target. However, the poor GDP performance could set back expectations of an interest rate rise.
Office for National Statistics Chief Economist Grant Fitzner said: ‘While GDP growth slowed in October the UK health sector again grew strongly while second-hand car sales and employment agencies also boosted the economy.
GDP rose by just 0.1 per cent in October, lower than analysts had expected. UK plc is still 0.5 per cent smaller than pre-pandemic levels
‘Taken as a whole, the dominant services sector reached its pre-pandemic level for the first time in twenty months.
‘These gains were offset by a drop in restaurants, which fell back after a strong summer, and reduced oil extraction and gas use.
‘Construction also saw its biggest drop since April last year, with notable falls in housebuilding and infrastructure work, partly driven by shortages in raw materials.’
The ONS said growth slowed as the construction sector notched up its largest drop in business since April 2020.
Chancellor Rishi Sunak said: ‘We’ve always acknowledged there could be bumps on our road to recovery, but the early actions we have taken, our ongoing £400bn economic support package and our vaccine programme mean we are well placed to keep our economy on track.
‘We have still been recovering quicker than expected, with more employees on payrolls than ever before and redundancies remaining low.’
The ONS said growth slowed as the construction sector notched up its largest drop in business since April 2020
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