London Daily

Focus on the big picture.
Monday, Jul 13, 2026

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
World Cup Visitors Turn American Big-Box Stores Into Souvenir Stops
Netflix Weighs Always-On Channels, Bundles and Short-Form Video
Passenger Is Pulled Partly Outside Ryanair Jet After Window Fails Mid-Flight
Innovation-led growth strategy
Public service reform pressure
Defence and industrial security
Labour leadership transition and economic reset
Northern England Pushes for Greater Influence in Britain’s Future Economic Model
UK Technology Strategy Focuses on Life Sciences, Digital Innovation and Research Investment
Britain and United States Maintain Focus on Pharmaceuticals Cooperation and Industrial Growth
UK Public Services Face Continued Pressure as Government Promises Visible Improvements
Regional Economic Power Becomes Key Theme in Britain’s Next Political Phase
Britain Expands Support for Small Businesses as Firms Seek Better Access to Finance
UK Economy Remains Central Political Challenge as Cost of Living and Growth Concerns Persist
National Health Service Introduces New Workplace Reviews to Improve Conditions for Healthcare Staff
UK Life Sciences Sector Secures More Than Three Billion Pounds in Investment to Support Innovation
Britain Strengthens Defence Strategy as Security Concerns Reshape Military and Industrial Policy
Andy Burnham Promises Stronger UK Defence Industry and Expanded Domestic Production
UK Government Faces Difficult Spending Choices as Labour Leadership Transition Approaches
Rachel Reeves Warns Andy Burnham of Immediate Economic Challenges After Expected Leadership Change
Andy Burnham Prepares to Lead UK Government With Plans for Regional Power Shift and Economic Reset
Government Creates Emergency Support Scheme for Financially Struggling Universities
United Kingdom Replaces Traditional Farm Subsidies With Payments Linked to Environmental Performance
National Grid Reports First Week of Electricity Generation Without Fossil Fuels
United Kingdom Financial Regulator Introduces Tougher Capital Rules for Cryptocurrency Exchanges
Belfast Harbour Expands Operations to Attract Investment Through United Kingdom and European Union Market Access
Scottish Government Threatens Legal Challenge Over Westminster Cuts to North Sea Transition Funding
United Kingdom Accelerates Trans-Pennine High-Speed Rail Project Linking Northern Cities
United Kingdom Secures Ten Billion Pound Investment for Cambridge Quantum Computing Campus
Port Talbot Steelworks Wins Support for Green Hydrogen Transition and Protection of Industrial Jobs
United Kingdom Sends Royal Navy Carrier Strike Group to Indo-Pacific as Regional Security Focus Expands
National Health Service Expands Artificial Intelligence Diagnostics Across England to Reduce Screening Backlogs
United Kingdom Launches Fifty Billion Pound Infrastructure Fund to Accelerate Housing and Construction
UK Medical Chiefs Update Health Guidance to Promote Everyday Physical Activity
Office of Communications Keeps Wikipedia Under Review Under UK Online Safety Rules
UK Defence Ministry Expands Deep-Strike Capability Through Precision Missile Programme
Russell Group Universities Warn Funding Cuts Could Damage NHS Workforce Training
UK Parliament Calls for National Emergency Broadcast as Heatwave Conditions Intensify
UK and Netherlands Strengthen Naval Cooperation With New Amphibious Defence Partnership
UK Defence Ministry Joins International Missile Programme With One Hundred and Ninety Million Pound Investment
Bank of England Warns Middle East Conflict and AI Risks Could Pressure UK Economy
UK Government Introduces New Rules to Limit Foreign Influence in Political Donations
UK and France Prepare Naval Mission to Protect Shipping Through Strait of Hormuz
United States Pressures UK to Increase Defence Spending at NATO Summit
Bank of England Warns Artificial Intelligence Investment Boom Could Create Financial Stability Risks
Bank of England Begins Direct Oversight of Critical Technology Providers Supporting UK Finance
Andy Burnham Set to Become UK Prime Minister After Labour Leadership Race Clears Path to Downing Street
Scottish Fishing Industry Calls for Emergency Support Amid Rising Costs
UK Supports Stronger European Response to Russian Actions in Ukraine
Devon and Cornwall Police Release Suspect in Ann Widdecombe Murder Investigation
×