London Daily

Focus on the big picture.
Saturday, May 31, 2025

COVID-19: Rishi Sunak warns of 'bumps on road' as figures show growth stalled even before arrival of Omicron variant

COVID-19: Rishi Sunak warns of 'bumps on road' as figures show growth stalled even before arrival of Omicron variant

The ONS data is likely to further dampen diminishing expectations that the Bank of England might announce a pre-Christmas interest rate hike next week.

Chancellor Rishi Sunak has warned of "bumps on our road to recovery" as new figures showed growth stalled even before the arrival of the Omicron variant.

GDP grew by just 0.1% in October, well short of the 0.4% expected by economists and a big slowdown on September's 0.6% expansion, the Office for National Statistics (ONS) said.

The data showed evidence of a summer dining-out spree petering out, as well as the beleaguered construction sector struggling with supply chain delays.

A summer dining out surge petered out


Experts fear that new Plan B COVID restrictions could pour further cold water on the recovery - with the ONS figures suggesting GDP in October was still 0.5% short of pre-pandemic levels in February 2020.

Mr 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 figures look likely to further dampen expectations that the Bank of England could hike interest rates next week to try to tackle cost of living increases.

Maike Currie, investment director at Fidelity International, said rising inflation and the spread of Omicron might send the economy into contraction.

"The Bank of England will be acutely aware that it's harder to dig an economy out of recession than to cool rising
inflation, which makes an interest rate rise next week increasingly unlikely," she said.

Manufacturing flatline as it struggled with supply chain problems


The ONS data for October pointed to a sharp fall in construction output as builders face higher costs and delays in the supply of materials such as steel, glass, concrete, and timber.

There was also a decline in restaurants after a strong summer, with a 7.5% fall in food and beverage services activities.

Industrial output was hit by big falls in electricity and gas as well as mining and quarrying, while the manufacturing sector flat-lined as it struggled with supply chain problems and staff shortages.

Growth was largely driven by a rise in face-to-face GP appointments as well as second-hand car sales and employment agencies - at a time when new cars as well as workers in some sectors have become hard to find.

The services sector, which represents four-fifths of economic output and ranges from pubs and hotels to law firms and accountants, recovered to pre-pandemic levels for the first time, though the consumer-facing part of the sector remains 5.2% short.

Alpesh Paleja, lead economist at the CBI, said: "Growth disappointed in October, reinforcing concerns about the resilience of the UK's economic recovery to the Omicron variant and the impact of further restrictions.

"We need to create consistency in our approach and build confidence by reducing the oscillation between normal life and restrictions as we learn to live with the virus and its variants."

Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
Labour MPs Urge Chancellor to Tax Wealthy Over Cutting Welfare
Publication of UK Child Poverty Strategy Delayed Until Autumn
France Detains UK Fishing Vessel Amid Post-Brexit Tensions
Calls Grow to Resume Syrian Asylum Claims in UK
Nigel Farage Pledges to Reinstate Winter Fuel Payments
Boris and Carrie Johnson Welcome Daughter Poppy
×