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The economy remained in reverse gear during October, according to official figures covering the month ahead of the government’s first budget.

The Office for National Statistics (ONS) said output fell 0.1% following the 0.1% decline recorded for the previous month.

It marked the first time since the COVID pandemic that the economy had shrunk for two consecutive months.

The figures showed zero growth in the powerhouse services sector, with manufacturing and construction declining at a pace of 0.6% and 0.4% respectively.

Economists had expected a positive headline figure.

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The data adds to the picture of a far more jittery economy during the second half of the year, in the wake of the general election.

Critics blame the government, accusing Sir Keir Starmer and his chancellor Rachel Reeves of a spectacular, early, own goal that spooked the public and businesses alike.

After three weeks in office, both warned of a “tough” budget to come on 30 October due to an inherited “£22bn black hole” in the public finances that a snap Treasury review had uncovered.

There has been strong evidence since then of a hit to sentiment as a result of the warning in data covering things like consumer spending and wage awards.

SLOWING ECONOMY MAY BOLSTER PACE OF RATE CUTS



Gurpreet Narwan

Business and economics correspondent

@gurpreetnarwan

The economy is now 0.1% smaller than it was before Labour came to power.

It’s been almost six months but the new government is yet to deliver on its promise to turbocharge economic growth.

The chancellor will today urge the public to be patient with her. The message will be: It will take a lot longer than six months to revive an economy that has been stagnating for a decade.

How confident should we be in her plan? On the one hand, falling inflation and interest rates should provide a more fertile environment for consumer spending and business investment.

The government’s plan to increase public investment should also boost demand in the economy and, if successful, lead to longer term sustained growth.

Yet, there are a number of risks. A big increase in business taxes next year will weigh on employment and growth.

Pubs, restaurants and retailers are already stagnating and that was before they reacted to the budget, which at the end of the month slapped them with a big increase in employers’ national insurance contributions..

The latest figures show output in consumer-facing services fell by 0.6% in October 2024, following growth of 0.4% in September 2024. Manufacturing also shrank by 0.6% as, across the economy, businesses went in ‘wait and see’ mode ahead of the budget. The risk is they didn’t like what they saw in the budget.

Then there is Trump and the risk of tariffs. Britain could escape the worst of the cross hairs but we will have to wait and see. If things go against us, it’s very possible that the Bank of England could soon start worrying more about weak growth than inflation, possibly a prelude – as we’ve seen in Europe – to a faster pace of interest rate cuts.

The economy, which had been the fastest-growing in the G7 between January and June, grew by 0.1% during the third quarter of the year.

Economists had been expecting a similar performance in the final three months of 2024 following a budget that largely spared working people additional pain but put businesses and those of wealthier means on the hook for extra taxes.

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CBI chief’s approach to budget tax shock

Business has since accused the chancellor of hurting the very working people she wants to protect as measures, such as higher employer National Insurance contributions, will only lead to weaker pay growth, fewer jobs and higher prices as additional costs are passed on.

Employers also argue that the extra tax burden, along with tougher employee rights legislation, will hurt investment at a time when Labour has prioritised growth in the economy.

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HMV owner slams budget ‘burden’

Ms Reeves said the figures were “disappointing”, but defended the budget.

She said: “We have put public finances back on a stable footing, capped the rate of corporation tax at the lowest level in the G7, established a £70bn National Wealth Fund to drive growth in our towns and cities, launched a 10-year infrastructure strategy and are creating pension mega funds to boost investment in British businesses, infrastructure and clean energy.”

The chancellor added: “We are determined to deliver economic growth as higher growth means increased living standards for everyone, everywhere.”

Mel Stride, the shadow chancellor, 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.”

He went on to say that Labour was left “the fastest growing economy in the G7”, adding: “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.”

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The government has shifted the growth emphasis to the public sector through a jump in investment in services such as the NHS.

Ms Reeves is borrowing more to help fund that and insists the budget was a one-off to help fix pressing problems that were unfunded by her predecessor.

The Bank of England has said that the reaction of business to the budget tax hikes is its main area of concern when judging the prospects for inflation and economic growth.

Financial markets are expecting four interest rate cuts next year but no change when policymakers meet for the final time in 2024 next week.

Commenting on today’s figures Yael Selfin, chief economist at KPMG UK, said: “October activity was held back by uncertainty ahead of the budget, with consumer and business confidence near recent lows.

“The fourth quarter could see a weaker pace of growth, as businesses come to terms with the higher tax burden announced at the budget as well as rising geopolitical uncertainties.

“Nevertheless, we expect higher public spending to lift GDP growth next year, with lower interest rates providing some boost to private sector demand.”

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Counter-terrorism police investigating after two women injured in Leeds

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Counter-terrorism police investigating after two women injured in Leeds

Counter-terrorism police are investigating after an incident involving a crossbow and a firearm left two women injured in Leeds.

Police were called to Otley Road at 2.47pm on Saturday to reports of a “serious incident involving a man seen with weapons”, West Yorkshire Police said.

Officers arrived at the scene to find two women injured – and a 38-year-old man with a self-inflicted injury. All three were taken to hospital, with the man held under arrest, but their injuries are not believed to be life-threatening.

“Two weapons have been recovered from the scene, which were a crossbow and a firearm,” Counter Terrorism Policing North East said in a statement.

The incident happened on the ‘Otley Run’ pub crawl, with one venue saying it was closed for the evening due to “unforeseen circumstances”.

Officers guard one of the crime scenes in Leeds
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Officers guard one of the crime scenes

Officers inside the cordon in Leeds
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Officers inside the cordon in Leeds

Counter Terrorism Policing’s statement added: “Due to the circumstances surrounding the incident, Counter Terrorism Policing North East have taken responsibility for leading the investigation with the support of West Yorkshire Police.

“Extensive enquiries continue to establish the full circumstances and explore any potential motivation.”

Home Secretary Yvette Cooper described it as a “serious violent incident” and said she was being kept updated by police.

“Thank you to the police and emergency services for their swift response,” she said. “My thoughts are with the victims and all those affected by this attack.”

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Wrexham promoted for third season in a row under Ryan Reynolds and Rob McElhenney

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Wrexham promoted for third season in a row under Ryan Reynolds and Rob McElhenney

Wrexham AFC have been promoted for the third season in a row.

The North Wales-based side has gone from the National League to the Championship in just three seasons, under its Hollywood owners Ryan Reynolds and Rob McElhenney.

Wrexham were second in the table and had a run of eight games unbeaten ahead of their match against Charlton Athletic on Saturday, which they won 3-0.

Wrexham's James McClean lifts the trophy after the Sky Bet League One match at SToK Racecourse, Wrexham. Picture date: Saturday April 26, 2025.
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Wrexham’s James McClean lifts the League One trophy. Pic: PA

Wrexham's Dan Scarr celebrates with the fans on the pitch after Wrexham won promotion to the Sky Bet Championship after the Sky Bet League One match at SToK Racecourse, Wrexham. Picture date: Saturday April 26, 2025. PA Photo. See PA story SOCCER Wrexham. Photo credit should read: Martin Rickett/PA Wire...RESTRICTIONS: EDITORIAL USE ONLY No use with unauthorised audio, video, data, fixture lists, club/league logos or "live" services. Online in-match use limited to 120 images, no video emulation. No use in betting, games or single club/league/player publications.
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Wrexham’s Dan Scarr celebrates with the fans on the pitch after Wrexham won promotion to the Championship. Pic: PA

It is the first time any club has been promoted for three consecutive seasons within the top five tiers of English football.

The third oldest association football club in the world, Wrexham AFC was bought by Reynolds and McElhenney in 2020, and has since been the subject of a Disney+ documentary, Welcome To Wrexham.

Reynolds, wearing a Wrexham sweatshirt, and McElhenney were pictured celebrating each goal, and after the game, as the fans came onto the pitch at the SToK Cae Ras (Racecourse Ground) to celebrate the victory with the players.

Wrexham co-owners Rob McElhenney (left) and Ryan Reynolds (right) and Ryan's wife Blake Lively before the Sky Bet League One match at SToK Racecourse, Wrexham. Picture date: Saturday April 26, 2025.
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Wrexham co-owners Rob McElhenney (L) and Ryan Reynolds and Ryan’s wife Blake Lively, before the match. Pic: PA

Both stars came onto the pitch after the supporters returned to the stands.

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Speaking to Sky Sports, McElhenney praised those behind the scenes, referring to “so many that don’t get the credit they deserve, people who aren’t talked about”.

Reynolds said bringing success back to the club “seemed like an impossible dream” when they arrived in North Wales in 2020.

Wrexham's Sam Smith celebrates in front of the fans on the pitch after Wrexham won promotion to the Sky Bet Championship after the Sky Bet League One match at SToK Racecourse, Wrexham. Picture date: Saturday April 26, 2025. PA Photo. See PA story SOCCER Wrexham. Photo credit should read: Martin Rickett/PA Wire...RESTRICTIONS: EDITORIAL USE ONLY No use with unauthorised audio, video, data, fixture lists, club/league logos or "live" services. Online in-match use limited to 120 images, no video emulation. No use in betting, games or single club/league/player publications.
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Wrexham’s Sam Smith celebrates in front of the fans after Wrexham won promotion to the Championship. Pic: PA

He put the three promotions down to “the coaching staff, the greatest dressing room” and an “all for one, one for all” attitude throughout the club, adding he was “speechless with their commitment and their emotion”.

As for the mouth-watering prospect of another promotion to the promised land of the Premier League, the pair agreed it was “for tomorrow”, before ending the interview with a joint mic-drop.

Veteran striker Steven Fletcher said, “as soon as I came to this club, I knew it was something special. We want to go again. We’ll reset in the summer, take a break and go again”.

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Direct action group Just Stop Oil holds final protest, claiming it has been ‘successful’

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Direct action group Just Stop Oil holds final protest, claiming it has been 'successful'

“It has been a success.”

Just Stop Oil (JSO) insists it’s been “successful” – as its members ceremoniously hang up their orange high-vis vests during a march in central London.

Since the group formed three years ago, it’s drawn attention and criticism for its colourful, controversial protests, which ranged from disrupting sporting events to throwing soup on Vincent van Gogh’s Sunflowers, and climbing on gantries over the M25. It sprayed orange paint over Stonehenge, and cost police forces tens of millions of pounds.

Those days are now behind it; to the relief of many.

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As a few hundred activists marched through London on Saturday, blocking roads as they went; taxi drivers blared their horns and football fans shouted abuse from the pavement.

The PA News Agency filmed the moment a white minivan seemed to drive towards a group of protesters blocking the road.

Protesters shouted “I’m being pushed back!” to police, while the driver could be heard shouting “What about my right to get home?” to the officers gathered.

But JSO never set out to be popular. And it believes its tactics – though hated – have been successful; thanks to the new Labour government’s commitment to not issue new oil or gas exploration licences.

That’s why, it says, its ceasing direct action.

JSO hangs up its high vis jackets in central London on Saturday
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JSO hangs up its high-vis jackets in central London on Saturday

A washing line of high-vis jackets signifies JSO's disbanding
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A washing line of high-vis jackets signifies JSO’s disbanding

“This moment marks the success of the JSO campaign – our demand was to end new oil and gas licences and that is now government policy.

“As a result of which four billion barrels of oil are being kept under the North Sea. The campaign has reached a natural end.”

Dr Oscar Berglund, senior lecturer in international public and social policy, disagrees that JSO is disappearing because it’s been “successful”.

He told Sky News policing strength and public perception might have more to do with it.

“They have very low levels of popularity. About 17% of the British population are kind of broadly supportive of what Just Stop Oil do. And that’s too low to recruit.

“It’s difficult to recruit members to something that is that unpopular, and then that a lot of people for good reason I think have kind of stopped believing in that kind of disruption as a means to achieve meaningful change.”

Group triggers specific new protest laws

One thing it did change is the law.

Policing commentator Graham Wettone tells us: “Obstruction of the highway, obstruction of rail networks for example, these are specific offences now.

“It’s given the police more tactics, more methods, more offences they can consider, even stopping and searching somebody who may have something to either lock themselves on or glue themselves to something.”

A JSO activist holds a picture of an imprisoned colleague
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A JSO activist holds a picture of an imprisoned colleague

Emma Smart was held in prison for her activism with both Insulate Britain and Just Stop Oil.

“The high-vis might be going away,” she tells me, “but we aren’t.”

“These people aren’t going anywhere, we are still committed, dedicated, terrified by the failings of this government and governments around the world.”

JSO activists throw orange paint at van Gogh's sunflowers
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JSO activists throw orange paint at van Gogh’s sunflowers

Orange smoke set off by JSO protesters at Stonehenge
Image:
Orange smoke set off by JSO protesters at Stonehenge

She hopes for a time of reflection before it returns in a new form but says the need for climate activism is stronger than ever.

She also believes that while most people dislike JSO tactics, it still raises awareness of the cause and might even push people to more moderate campaign groups.

Just Stop Oil came behind other, similarly controversial climate campaign groups like Insulate Britain and Extinction Rebellion, and as it says goodbye, its disruptive methods have been seized upon by other organisations like the Pro-Palestinian Youth Justice.

The infamous Just Stop Oil orange vests might be going away, but the individual activists, their cause and campaign tactics feel here to stay.

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