FX.co ★ UK Economy Contracts Once More

The British economy experienced an unexpected contraction of 0.1% month-on-month in October 2025, following a similar decline in September and defying forecasts of a 0.1% growth. This marks the fourth consecutive month of stagnant economic performance. The services sector saw a decline of 0.3%, reversing a 0.2% increase in September, with significant negative contributions from industries such as wholesale and retail trade and the repair of motor vehicles and motorcycles, which fell by 4.3%, and computer programming, consultancy, and related activities, which decreased by 3.6%. The construction sector also saw a decline, dropping by 0.6%, in contrast to a 0.2% increase in September, mainly due to a 2.4% decrease in private new housing. Conversely, the production sector showed resilience, increasing by 1.1% after recovering from a 2% decline. This growth was witnessed across several areas: manufacturing rose by 0.5%, primarily driven by a notable 9.5% increase in the manufacture of motor vehicles and trailers; mining surged by 4.3%; electricity, gas, steam, and air conditioning grew by 2.1%; and water supply, sewerage, and waste management services expanded by 1.5%. In the broader context, GDP also shrank by 0.1% over the three months leading to October.