Latest figures show UK economy shrinks again

Figures from the Office for National Statistics (ONS) showed the unexpected fall in GDP was driven by declines in construction and production, while the dominant services sector stagnated.

Britain's economy shrank by 0.1% in October, underlining the scale of Labour's challenge to get the economy growing.

Economists, polled by Reuters, had expected the economy to grow by 0.1%. It follows a decline of 0.1% in September and sluggish growth of 0.1% in the third quarter of the year, according to figures last month.

Keir Starmer said last week it was the government's "aim" to make the UK the fastest-growing G7 economy, while pledging to deliver higher real household disposable income by 2029.

However, a range of companies have said they plan to slow spending and hiring after Labour's budget in October, which included £40bn of tax rises.

Economists said the second successive monthly contraction in GDP meant the economy had grown for only one of the five months to October, and might mean the economy shrank for the fourth quarter as a whole.

The chancellor, Rachel Reeves, said the figures were "disappointing" but insisted Labour was putting the economy back on track for growth.