UK Economy Unexpectedly Contracts in October Amid Budget Uncertainty

The UK economy unexpectedly remained in contraction in October, with Gross Domestic Product falling by 0.1% month-on-month matching the previous month's drop and missing the expected 0.1% growth as uncertainty ahead of Chancellor Rachel Reeves' Autumn budget likely dampened business and consumer investment, despite the manufacturing sector seeing a 0.5% rebound due to the restart of Jaguar Land Rover's operations. Following the budget, where tax increases were less severe than feared, the Confederation of British Industry lifted its economic growth forecast for next year to 1.3% (up from 1.0%), citing a temporary boost from government spending, though the overall sentiment remains one of "cautious optimism." Meanwhile, with inflation falling to 3.6% in October, the Bank of England is widely expected to cut interest rates by a quarter point to 3.75% at its upcoming policy meeting next week.