London Daily

Focus on the big picture.
Saturday, Dec 20, 2025

Economy returns to growth in October - but recession still expected

Economy returns to growth in October - but recession still expected

There is no sudden recovery in output to cheer as the impact of the Queen's funeral continues to play out in UK growth figures.
The economy returned to growth in October, according to early official figures which experts suggest could be the last to show expansion for some time.

The Office for National Statistics (ONS) reported growth of 0.5% - following a contraction of 0.6% in September which was largely put down to disruption to usual activity because of the bank holiday for the Queen's funeral.

October's partial recovery, which was slightly stronger than economists had forecast, was mostly explained by the number of working days returning to normal rather than any real surge in output.

The ONS charted the main boost coming from wholesale and retail activity - both significantly affected by closures as a mark of respect to the late Queen.

As such, economists still expect a recession to be confirmed at the end of the year.

That is because output is tipped to be negative during the current fourth quarter as a whole, following the 0.2% dip recorded for the third quarter to September.

The Bank of England and Office for Budget Responsibility - which have both already declared their belief that the UK is in recession - expect the downturn to last throughout 2023 but remain shallow.

Economic activity has slowed as a result of high inflation, mostly caused by Russia's war in Ukraine, curbing appetite for spending.

Interest rate rises from the Bank, aimed at curbing inflation, have raised borrowing costs to further dampen demand.

Fixed rate mortgages, also, are yet to ease back to levels seen before the September mini-budget which saw financial markets baulk at the spending plans of the-then Liz Truss-led government.

New chancellor Jeremy Hunt, who has since rowed back on the growth measures, said of the latest growth figures: "High inflation, exacerbated by Putin's illegal war, is slowing growth across the world, with the IMF predicting a third of the world economy will be in recession this year or next.

"While today's figures show some growth, I want to be honest that there is a tough road ahead.

"Like the rest of Europe, we are not immune from the aftershocks of Covid-19, Putin's war and high global gas prices.

"Our plan has restored economic stability and will help drive down inflation next year, but also lay the foundations for long-term growth through continued record investment in new infrastructure, science and innovation."

The Bank, which raised its rate by 0.75 percentage points last month, is widely expected to impose a further hike of 0.5 percentage points this week.

It is anticipating an easing in energy-driven inflation ahead but forecast to maintain the pressure given that the rate of inflation is at a 41-year high of 11.1%.

Figures for November, due on Wednesday, are expected to show an annual rate of 10.9% according to economists polled by the Reuters news agency.
Newsletter

Related Articles

0:00
0:00
Close
Women in Partial Nudity — and Bill Clinton in a Dress and Heels: The Images Revealed in the “Epstein Files”
US Envoy Witkoff to Convene Security Advisers from Ukraine, UK, France and Germany in Miami as Peace Efforts Intensify
UK Retailers Report Sharp Pre-Christmas Sales Decline and Weak Outlook, CBI Survey Shows
UK Government Rejects Use of Frozen Russian Assets to Fund Aid for Ukraine
UK Financial Conduct Authority Opens Formal Investigation into WH Smith After Accounting Errors
UK Issues Final Ultimatum to Roman Abramovich Over £2.5bn Chelsea Sale Funds for Ukraine
Rare Pink Fog Sweeps Across Parts of the UK as Met Office Warns of Poor Visibility
UK Police Pledge ‘More Assertive’ Enforcement to Tackle Antisemitism at Protests
UK Police Warn They Will Arrest Protesters Chanting ‘Globalise the Intifada’
Trump Files $10 Billion Defamation Lawsuit Against BBC as Broadcaster Pledges Legal Defence
UK Says U.S. Tech Deal Talks Still Active Despite Washington’s Suspension of Prosperity Pact
UK Mortgage Rules to Give Greater Flexibility to Borrowers With Irregular Incomes
UK Treasury Moves to Position Britain as Leading Global Hub for Crypto Firms
U.S. Freezes £31 Billion Tech Prosperity Deal With Britain Amid Trade Dispute
Prince Harry and Meghan’s Potential UK Return Gains New Momentum Amid Security Review and Royal Dialogue
Zelensky Opens High-Stakes Peace Talks in Berlin with Trump Envoy and European Leaders
Historical Reflections on Press Freedom Emerge Amid Debate Over Trump’s Media Policies
UK Boosts Protection for Jewish Communities After Sydney Hanukkah Attack
UK Government Declines to Comment After ICC Prosecutor Alleges Britain Threatened to Defund Court Over Israel Arrest Warrant
Apple Shutters All Retail Stores in the United Kingdom Under New National COVID-19 Lockdown
US–UK Technology Partnership Strains as Key Trade Disagreements Emerge
UK Police Confirm No Further Action Over Allegation That Andrew Asked Bodyguard to Investigate Virginia Giuffre
Giuffre Family Expresses Deep Disappointment as UK Police Decline New Inquiry Into Andrew Mountbatten-Windsor Claims
Transatlantic Trade Ambitions Hit a Snag as UK–US Deal Faces Emerging Challenges
Ex-ICC Prosecutor Alleges UK Threatened to Withdraw Funding Over Netanyahu Arrest Warrant Bid
UK Disciplinary Tribunal Clears Carter-Ruck Lawyer of Misconduct in OneCoin Case
‘Pink Ladies’ Emerge as Prominent Face of UK Anti-Immigration Protests
Nigel Farage Says Reform UK Has Become Britain’s Largest Party as Labour Membership Falls Sharply
Google DeepMind and UK Government Launch First Automated AI Lab to Accelerate Scientific Discovery
UK Economy Falters Ahead of Budget as Growth Contracts and Confidence Wanes
Australia Approves Increased Foreign Stake in Strategic Defence Shipbuilder
Former UK Prime Minister Boris Johnson proclaims, “For Ukraine, surrendering their land would be a nightmare.”
Microsoft Challenges £2.1 Billion UK Cloud Licensing Lawsuit at Competition Tribunal
Fake Doctor in Uttar Pradesh Accused of Killing Woman After Performing YouTube-Based Surgery
Hackers Are Hiding Malware in Open-Source Tools and IDE Extensions
Traveling to USA? Homeland Security moving toward requiring foreign travelers to share social media history
UK Officials Push Back at Trump Saying European Leaders ‘Talk Too Much’ About Ukraine
UK Warns of Escalating Cyber Assault Linked to Putin’s State-Backed Operations
UK Consumer Spending Falters in November as Households Hold Back Ahead of Budget
UK Orders Fresh Review of Prince Harry’s Security Status After Formal Request
U.S. Authorises Nvidia to Sell H200 AI Chips to China Under Security Controls
Trump in Direct Assault: European Leaders Are Weak, Immigration a Disaster. Russia Is Strong and Big — and Will Win
"App recommendation" or disguised advertisement? ChatGPT Premium users are furious
"The Great Filtering": Australia Blocks Hundreds of Thousands of Minors From Social Networks
Mark Zuckerberg Pulls Back From Metaverse After $70 Billion Loss as Meta Shifts Priorities to AI
Nvidia CEO Says U.S. Data-Center Builds Take Years while China ‘Builds a Hospital in a Weekend’
Indian Airports in Turmoil as IndiGo Cancels Over a Thousand Flights, Stranding Thousands
Hollywood Industry on Edge as Netflix Secures Near-$60 Bln Loan for Warner Bros Takeover
Drugs and Assassinations: The Connection Between the Italian Mafia and Football Ultras
Hollywood megadeal: Netflix acquires Warner Bros. Discovery for 83 billion dollars
×