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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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Reform in contention in potential nightmare by-election for Labour

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Reform in contention in potential nightmare by-election for Labour

The jailing of Mike Amesbury for 10 weeks for assault means Sir Keir Starmer potentially faces his first by-election test since becoming prime minister.

Officially, the 55-year-old former Labour MP for Runcorn and Helsby now faces a recall petition, but realistically he’s under enormous pressure to resign without delay.

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Amesbury was immediately disowned by the Labour Party, which condemned his actions in the assault as “completely unacceptable” and said it was time for a new MP.

“Local residents in the Runcorn and Helsby constituency deserved better, and we look forward to them getting the representation they deserved in the future with a new MP,” said a party spokesperson.

However, if Amesbury appeals against his sentence, as it’s being suggested he may, that would delay a by-election as a writ can’t be moved unless appeals are exhausted, or he stands down voluntarily.

Amesbury held the Cheshire seat with a seemingly healthy 14,696 majority at the July 2024 general election. But in a potential nightmare for Sir Keir, it was Reform UK – not the Conservatives – in second place.

 Nigel Farage addresses the Conservative Political Action Conference in Maryland.
Pic: Reuters
Image:
Nigel Farage’s Reform UK leads the opinion polls. Pic: Reuters

A challenge for Labour – but Tories in disarray

The current state of opinion polls, with Nigel Farage’s party edging ahead of Labour, suggests Reform will be in contention in a by-election and could pull off a sensational victory.

And so predictably it was Reform’s chairman Zia Yusuf who led calls from opponents for Amesbury to resign, followed by a handful of Tory backbenchers – but not by Kemi Badenoch yet.

“The great people of Runcorn deserve far better than waiting six weeks for a recall petition to take place,” said Mr Yusuf. “We call on Mike Amesbury to do the honourable thing and resign immediately.”

The risk of humiliation by Mr Farage may deter Labour big hitter Jonathan Ashworth – one of five Labour MPs defeated in July last year – from gambling on a quick return to Westminster in this seat.

The Conservatives appear to be in disarray over a potential by-election. Sky News can reveal that party HQ last week invited applications to be Tory candidate, with a deadline fast approaching.

“We are writing to invite applications for Runcorn and Helsby,” said a letter from the party’s candidates team. “We are particularly keen to see applications from people with links to the constituency.

“If you are eligible to stand and interested in applying, please apply through the Microsoft Form here and apply by no later than Tuesday 25th February at 12pm.”

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Suspended Labour MP Mike Amesbury walks outside Chester Magistrates Court.
Pic: Reuters
Image:
Suspended Labour MP Mike Amesbury. Pic: Reuters

When could a by-election happen?

A recall petition happens if an MP is jailed or receives a suspended sentence of a year or less. It lasts six weeks and if 10% of electors sign it, there’s a by-election – though the recalled MP can stand.

The last MP to be jailed was Tory Imran Ahmad Khan, former MP for Wakefield, who was sentenced to 18 months after being found guilty of sexually assaulting a 15-yar-old boy. Labour won that by-election.

Although Sir Keir and the Labour high command have acknowledged since Amesbury pleaded guilty that a by-election in Runcorn and Helsby was almost inevitable, the party faces a dilemma over the timing of a poll.

Labour’s statement looking forward to a new MP suggests the party favours a speedy by-election, without the delay of a recall petition, rather than waiting until the local elections on 1 May or even later.

But there are dangers in a quick poll, as Sir Keir will recall. He was advised to rush the Hartlepool by-election in 2021, with disastrous results, and he has admitted he considered quitting after that humiliating defeat.

Sir Keir Starmer leaves after a meeting in Paris with European leaders on Ukraine on 17 February. Pic: Reuters
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Sir Keir Starmer had a good record in by-elections when Labour were in opposition. Pic: Reuters

The numbers in Runcorn and Helsby last July were Labour on 22,358 votes (52.94%), Reform 7,662, (18.14%), Conservatives 6,756, (16%), Greens 2,715, (6.43%) and Liberal Democrats 2,149, (5.09%).

Runcorn is on the southern bank of the River Mersey and has expanded as a new town since 1964, and dominates the constituency with a population of 61,000. There are two smaller towns, Frodsham and Helsby.

Amesbury became MP for the processor seat of Weaver Vale in 2017. He was a shadow minister for work and pensions under Jeremy Corbyn, and for housing, communities and local government under Sir Keir until 2022.

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Luton teenager who murdered family was planning school shooting

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Luton teenager who murdered family was planning school shooting

A teenager who admitted killing his mother and two younger siblings was plotting a school shooting, it can now be reported.

Nicholas Prosper, 19, appeared at Luton Crown Court over the deaths of Juliana Falcon, 48, Giselle Prosper, 13, and Kyle Prosper, 16.

Their bodies were found at a flat in Leabank, off Wauluds Bank Drive, Luton, in September.

As he appeared in court on Monday, Prosper spoke to confirm his identity and to plead guilty to three charges of murder.

Assistant Chief Constable John Murphy, from Bedfordshire Police, said: “We understand the deep shock this case will have on people within Luton and across the country.

“Juliana, Kyle and Giselle were brutally murdered in their home by someone intent on causing the maximum harm and distress on not only his family, but to the wider community.

“We are extremely grateful to our officers who stopped him and prevented him from going through with his plans to target a school.

“We are working closely alongside Luton Borough Council to engage with schools in Luton to provide support, assistance and guidance to both schools and parents.”

Giselle Prosper (left), Juliana Prosper (centre), Kyle Prosper (right) found dead in a flat in Luton, Leabank, on Friday 13 September 2024. Pic: family pics issued via Bedfordshire police
Image:
Giselle Prosper (left), Juliana Falcon (centre), Kyle Prosper (right). Pic: Family pictures via Bedfordshire Police

Leader of Luton Council, Hazel Simmons MBE, branded the murders as “senseless” and said their thoughts were with the victims, their family and friends.

She then said the “revelation that the perpetrator had plans to cause further harm in one of our schools is extremely shocking, distressing and upsetting”.

The councillor sought to reassure parents by saying “our schools have robust systems in place to keep children safe and security is constantly reviewed and monitored”.

After recently asking schools to review their security, Ms Simmons said schools will be asked to further review their measures in light of what emerged from court on Monday.

“On behalf of the town I would like to thank and praise the excellent work of Bedfordshire Police for apprehending the perpetrator before he attempted to cause more harm.

“However, we know this case will be unsettling for parents which is why the council is working with schools to put support in place in our schools to anyone who needs it.”

Prosper also admitted a number of other offences, including purchasing a shotgun without a certificate, possession of a shotgun with intent to endanger life and possession of a kitchen knife in a public place.

He will be sentenced on 5 March and has been remanded in custody.

‘A cold-blooded attack’

Chris Derrick, a deputy chief crown prosecutor at the Crown Prosecution Service (CPS), said the victims’ lives “were stolen in a cold-blooded attack”.

Mr Derrick said in a statement “the full extent of Prosper’s actions will be laid bare when he is sentenced, and he can expect to face a very long time behind bars”.

He added: “We hope today’s conviction offers some solace to those who loved and cared for them, as they mourn their loss.”

A friend of Ms Falcon previously described her as someone who “lived for her children” and said she was “a positive person who will be so terribly missed”.

A previous statement on X from the headteacher at Lea Manor High School said they were “deeply shocked” by the death of Giselle.

“Giselle was a beautiful soul and a model pupil, she excelled in all her subjects and will be sorely missed, particularly by her friends in Year 9.”

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Kyle’s school described the incident as “devastating” and offered “heartfelt condolences” to his family.

A previous statement issued by Cardinal Newman Catholic School said: “This is devastating news to all those who knew and loved Kyle and it will take some time to come to terms with the profound sense of loss.

“We know this will be a difficult time for students and staff and we will do all we can to support them with love and compassion.

“We extend our heartfelt condolences to Kyle’s family on their immeasurable loss, to his friends and to all those in neighbouring schools who are coming to terms with their own loss.”

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Manchester: Girl, 3, who died in crash involving van and tram named – as police arrest man

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Manchester: Girl, 3, who died in crash involving van and tram named - as police arrest man

A three-year-old girl who died in a crash involving a tram and a van in Manchester has been named.

Louisa ‘Lulu’ Palmisano, from Burnley, died following the incident on Saturday. She was visiting the city with her parents at the time.

Greater Manchester Police (GMP) have arrested a 36-year-old man on suspicion of causing death by dangerous driving. He remains in police custody, the force said, and the investigation is still live.

Lulu’s parents said in a statement: “Louisa (Lulu) was the sweetest, kindest, and most generous little girl.

“She was full of creativity and joy, and she absolutely loved going to nursery every day.

“Her absence has left a devastating void in our family – she was our only child, our whole world.

“We were simply enjoying a happy family day out in Manchester when this unimaginable tragedy struck. In an instant, our lives were shattered beyond repair.

“The pain of losing her is unbearable, and we miss her more than words can ever express.”

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Flight diverted after ‘bomb threat’

Emergency services responded to reports of a road traffic collision involving a tram and a van in Manchester city centre at around 10am on Saturday, GMP said in a statement on Monday.

The van collided with the tram, which forced the van on to a pavement where it collided with a pedestrian.

Lulu was taken to hospital and sadly passed away from her injuries, the force said.

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