UK economy estimated to have grown 0.5% in October

October's growth was slightly stronger than economists had forecast, having put it at just 0.4%

The UK economy is estimated to have grown 0.5% in October, according to data from the Office for National Statistics.

This was a reversion of the 0.6% fall seen in September, a month which was impacted by the additional bank holiday for the Queen's funeral.

Looking at the three-month window, GDP fell by 0.3% in the three months to October 2022 compared with the three months to July 2022.

October's growth was slightly stronger than economists had forecast, having put it at just 0.4%.

The main sector contributors were the services sector, which grew by 0.6% after falling by 0.8% in September, the largest driver coming from wholesale and retail trade.

The construction sector grew by 0.8% in October 2022, making it its fourth consecutive increase.

Jeremy Batstone-Carr, European strategist at Raymond James, called this data a ‘positive step back towards growth’ but heeded caution about getting overtly excited, since September's results had been unexpectedly skewed.

He said: Today's GDP figures flatter to deceive, concealing an otherwise-shrinking economy.

The data is key for determining if the UK is in a recession or not, although GDP contracted for the prior two months meeting the criteria for a technical recession, but the strategist said the UK was not ‘teetering on the edge of a recession, it is fully in one’.

We are now feeling the pain of relentless inflation and interest rate rises, which are both crippling business and household spending, he said.

James McManus, chief investment officer at Nutmeg, commented: The worst recessions usually follow a period of excess, where companies and consumers borrow too much and then the downturn is much more painful.

He said: In recent years there has not been enough of a boom to worry about a bust.