The United Kingdom (TADAWUL:)’s economy experienced an unexpected contraction in October, with Gross Domestic Product (GDP) decreasing by 0.1% from the previous month. This decline was reported by the Office for National Statistics (ONS) on Friday and is attributed to a fall in production output. This drop countered the forecasts of economists who had anticipated a 0.1% increase in GDP for the month.
This contraction marks the second month in a row that the U.K. has seen its economy shrink, following another 0.1% decline in September. Despite the monthly downturns, the ONS noted that the real GDP had a marginal growth of 0.1% in the three-month period ending in October, compared to the three months ending in July.
Following the release of the economic data, the British pound weakened, with a 0.3% decrease against the U.S. dollar, reaching $1.2627 by 7:45 a.m. in London.
The U.K. Finance Minister, Rachel Reeves, acknowledged the disappointing nature of the October figures in a statement released on Friday. She maintained, however, that the government’s economic policies are aimed at fostering long-term growth. Reeves highlighted the implementation of a cap on corporation tax and the initiation of a decade-long infrastructure plan as key components of the government’s strategy to stimulate economic expansion.
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