LONDON: Britain’s economy rebounded in October a little more strongly than expected from September when output was affected by a one-off public holiday to mark the funeral of Queen Elizabeth, but a recession remained on the cards, official data showed on Monday. Gross domestic product grew by 0.5% in October after September’s 0.6% contraction, the Office for National Statistics said.
A Reuters poll of economists had pointed to a 0.4% bounce-back. “While today’s figures show some growth, I want to be honest that there is a tough road ahead,” finance minister Jeremy Hunt said in response to the data.
“Like the rest of Europe, we are not immune from the aftershocks of Covid-19, Putin’s war and high global gas prices,” he said. In the three months to October, Britain’s economy shrank by 0.3%, a smaller fall than a median forecast for a 0.4% contraction in the Reuters poll but the biggest drop since early 2021.
The Bank of England - which looks set to raise interest rates for a ninth meeting in a row on Thursday to contain the risks from an inflation rate above 11% - said last month that Britain’s economy looked set for a two-year recession if interest rates rose as much as investors had been pricing.
Even without further rate hikes, the economy would shrink in five of the six quarters until the end of 2023, it said.
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