RACHEL Reeves admitted she was “disappointed” today after the economy shrank for the second consecutive month.
Britain’s GDP fell by 0.1 per cent in October, following an identical slump in September.
The Chancellor insisted her big spending Budget will help revive the dismal growth results – a flagship Labour pledge.
But businesses have warned her sweeping tax raids – yet to kick in – will force them to make cutbacks on staff and investment.
Ms Reeves said this morning: “We are determined to deliver economic growth as higher growth means increased living standards for everyone, everywhere. This is what our Plan for Change is all about.
“While the figures this month are disappointing, we have put in place policies to deliver long term economic growth.”
She pointed to her decision to cap Corporation Tax at 25 per cent, and pump billions into clean energy projects.
Hikes to the employer rate of National Insurance were announced at the October 30 Budget and so will not be fully reflected in today’s ONS stats.
Shadow Chancellor Mel Stride blamed the dire economic performance on Ms Reeves’ gloom-mongering about the state of the finances since she took office.
The Tory MP said: “It is no wonder businesses are sounding the alarm. This fall in growth shows the stark impact of the Chancellor’s decisions and continually talking down the economy.
“Labour were left the fastest growing economy in the G7 but because of their decisions growth is now under serious pressure.
“The impact will be felt by families through higher taxes, fewer jobs, higher prices and higher interest rates.”
In the past three months the economy increased very slightly, thanks to 0.2 per cent growth in August.
October saw services flatline at 0 per cent growth, while production output fell 0.6 per cent and construction down 0.4 per cent.
The ONS’ Liz McKeown said: “Oil and gas extraction, pubs and restaurants and retail all had weak months, partially offset by growth in telecoms, and in legal firms.”
Ben Jones from the Confederation of British Industry said: “Following these disappointing figures, businesses will be glad to see the end of 2024. Nevertheless, firms remain hopeful that things will improve in the New Year.
“It may take a few more months for firms to work through the impact of the sharp increase in employment taxes outlined in the Budget and adjust their hiring and investment plans accordingly.”
