GDP grows – but the UK isn’t out of the woods on recession

Have the prospects of a recession been overstated? That would be the most optimistic reading of this morning’s update from the Office for National Statistics, which released the latest set of monthly GDP data showing 0.5 per cent growth in October. This is the biggest monthly rise since January, when the economy was bouncing back from a voluntary slowdown in activity when the Omicron variant of Covid hit last Christmas.

Unfortunately, a breakdown of the data waters down that optimism. October’s 0.5 per cent growth followed a 0.6 per cent contraction in September, half of which the ONS thinks was directly linked to the bank holiday added to the calendar for the late Queen’s funeral. Much of October’s headline growth figure will be reflecting displaced and delayed economic activity from September, when businesses had shorter opening hours or were closed altogether during the mourning period.