Saturday, July 20News For London

UK slide towards contraction as cost of living rises

The United Kingdom suffered an economic setback after newly released data revealed an unexpected contraction in growth in October. Gross domestic product, the primary measure of economic activity, fell by 0.3% last month, reversing a 0.2% increase in September.

The contraction of output in the manufacturing, services, production, and construction sectors tipped the scales in the negative direction.

The unexpected drop fuels fears of a recession as rising inflation and interest rates squeeze British households and businesses. Consumers have less money to spend on goods and services because of the cost-of-living crisis.

Policymakers must now weigh whether additional rate hikes aimed at taming inflation could harm an already struggling economy more.