What you need to know today

And finally…

The UK economy contracted by 0.1% in October, according to official figures.

The surprise fall in gross domestic product (GDP) – a measure of economic output – comes after a similar unexpected 0.1% drop in September and 0% growth in August.

Economists polled by the Reuters news agency had predicted that October GDP would grow by 0.1%.

The figures, from the Office for National Statistics (ONS), represent more bad news for the chancellor over the state of the UK economy.

Commentators had warned that consumer spending was likely to be restrained in the run-up to November’s budget, amid concerns about the impact of Rachel Reeves’s potential measures on households and businesses.

UK GDP has also been hit hard by disruption to car production caused by a cyber attack on Jaguar Land Rover.

The ONS said that during October, the UK’s services sector fell by 0.3%, while construction was down 0.6%. However, production grew by 1.1%.

It found that GDP on a rolling three-month basis, to October, also fell by 0.1%.

Read more from Sky News:
Appeal court delay for first Post Office Capture case
Mail owner lines up NatWest to help fund Telegraph bid
Burger King UK lands new backing

The ONS’s director of economic statistics, Liz McKeown, said: “Within production, there was continued weakness in car manufacturing, with the industry only making a slight recovery in October from the substantial fall in output seen in the previous month.

“Overall services showed no growth in the latest three months, continuing the recent trend of slowing in this sector. There were falls in wholesale and scientific research, offset by growth in rental and leasing and retail.”

Interest rate cut ‘nailed on’

Commentators also blamed rumours and leaks in the run-up to the budget for dampening demand.

Scott Gardner, from banking giant JP Morgan, said that despite expectations of a return to growth, the economy continued to “battle a period of inconsistent productivity”.

He added: “Speculation about potential budget announcements had a numbing effect on consumers and businesses in the lead up to the chancellor’s speech at the end of November.”

Suren Thiru, from the Institute of Chartered Accountants, said the data increased the likelihood of the Bank of England cutting interest rates next week.

He said: “With these downbeat figures likely to further fuel fears among rate-setters over the health of the UK economy, a December policy loosening looks nailed on, particularly given the likely deflationary impact of the budget.”

Figures ‘extremely concerning’

Barret Kupelian, chief economist at PwC, said that while some of the blame could be attributed to the Jaguar Land Rover cyber attack, “the bigger story is that speculation around the autumn budget kept households and businesses in wait-and-see mode”.

He added: “Given the timing of the budget, November’s GDP print is likely to look similarly subdued before any post-budget effects start to show up.”

Sir Mel Stride, the Tory shadow chancellor, described the figures as “extremely concerning”, claiming they were “a direct result of Labour’s economic mismanagement”.

A Treasury spokesperson said: “We are determined to defy the forecasts on growth and create good jobs, so everyone is better off, while also helping us invest in better public services.”

Left-wing Labour MPs are split on whether they would welcome an Angela Rayner leadership bid, as speculation continues over whether Sir Keir Starmer can survive.

Senior MPs on the left have told Sky News that the former deputy prime minister “only needs to push the button” and she would have the support to take out her old boss.

But others said it “won’t wash with the public”, given it was only a few months ago that she resigned in scandal over her tax affairs. She has also been accused of not doing enough for the left while she was in government.

Sir Keir has insisted he would face down any threat to his leadership, while Ms Rayner’s allies say she has no plan to oust him.

But many MPs have said privately – if not publicly – that a challenge to his position appears increasingly inevitable given the state of the polls.

One MP in the socialist campaign group (SCG) said “all Angela needs to do is push the button” and MPs would get behind her – citing her popularity with the Labour membership.

Another MP said: “I think she would have a healthy number of people who would back her.”

Ms Rayner, a former trade union rep, was elected by members to be deputy Labour leader in 2020. She was a longstanding member of Jeremy Corbyn’s shadow cabinet and is revered by many of her colleagues on the left for her rise from a working-class background to the top of British politics, having left school at 16, pregnant, and with no qualifications.

However one MP said while they personally “rate her a lot” she “could have done more” for the left while in government.

“Ange was the deputy leader for a long time. I have to say she went to ground for a long time and didn’t speak up. Whether she has the support of MPs or the country I don’t know.”

This view was echoed by another colleague, who said she is “complicit” in the government’s failures.

This MP, in a traditional red wall seat, said the “visceral dislike of Starmer is baked in” and they have never experienced anything like the anti-Labour sentiment they are hearing on the doorstep.

They said any change of leader would have to be an outsider with a radical vision “like 1945”. “It would have to be Andy”, they said, referring to the Greater Manchester metro mayor Andy Burnham.

‘Burnham is a no-brainer’

Many MPs on both the left and the so-called “soft-left” told Sky News he would be their preferred candidate, given he is not associated with the current government, he has a different vision for the country and is popular with the public.

Mr Burnham is not currently an MP but he has not ruled out standing if a seat became available.

“In a hypothetical universe where all the barriers are overcome then Burnham is a no-brainer,” said one MP from the 2024 intake.

Read more from politics:
Farage’s former school responds to claims he made racist comments
Reeves acknowledges damage of ‘too many’ budget leaks

Another MP supportive of a Burnham takeover said a Rayner return “won’t wash with the public” given she had to resign from the second most senior position in government for underpaying stamp duty in September. They said it also wouldn’t be credible for her to “suddenly” start criticising the direction of the Starmer government given she was so closely tied to it.

As another MP put it: “I’d be backing a candidate from the left of the party. Angela Rayner is not from the left of the party.”

Other runners and riders

Any challenger would need the public backing of 80 colleagues to trigger a leadership contest. May is seen as crunch date if the local elections go as badly as predicted.

Other names that have come up include Health Secretary Wes Streeting and Home Secretary Shabana Mahmood. Mr Streeting is seen as a charismatic communicator who could take on Nigel Farage and Zack Polanski, while MPs within the “blue Labour” caucus are impressed with Ms Mahmood’s hard line on immigration.

But MPs on the left feel this would only offer a temporary boost in the polls as the pair are both seen as being on the centre-right, and a change of leader would be pointless without a change of direction.

Another name that has come up is the former Labour leader Ed Miliband, but while he is more to the left he has been rejected by the public once – having lost the 2015 election.

‘No active plot’

The MPs who spoke to Sky News stressed there was no active plot, but rather a general consensus that it is looking increasingly likely Sir Keir won’t be able to turn things around.

MPs who disagree with the prime minister’s politics said they are surprised at how personally disliked he is on the doorstep as he is ultimately a “nice man”.

They fear he has lost the trust of the public by saying one thing and doing another, with the winter fuel fiasco still coming up in areas where Reform UK is making gains.

As one MP put it: “We want him [Sir Keir] to do well and do better… but you can’t go on forever if things look terrible in the opinion polls.”

👉Listen to Politics at Sam and Anne’s on your podcast app👈

‘Budget has sparked a sea-change’

MPs have recently revived the soft-left tribune group with the aim of influencing the government to take more of a progressive direction.

Ms Rayner addressed this group on Tuesday night, along with new deputy leader Lucy Powell and cabinet ministers Mr Miliband and Lisa Nandy.

One MP who spoke to Ms Rayner said she has “absolutely no plans” to launch a leadership bid “unless she is keeping it quiet”. They added that the subject of a leadership challenge didn’t come up in any of the speeches and there was an “upbeat atmosphere” following the lifting of the two-child benefit cap.

“The budget has landed well with the party,” they said. “[The meeting] felt like a sea change.”

As deputy prime minister and housing secretary, Ms Rayner introduced the Employment Rights Bill within 100 days and pushed through reforms to renters rights, the leasehold system and further devolution. She is also said to have played a crucial role in persuading Sir Keir to water down welfare cuts in the face of a major backbench rebellion.

A source close to her defended her record, saying she is “not interested in pacts and plots” and wants the government to succeed. They said she is not finished in politics but “she’s no one’s pawn, she’s her own person”.

Ms Rayner resigned after an ethics investigation found she acted in good faith, but broke the ministerial code by failing to get the correct tax advice after purchasing a flat in Brighton. She referred herself to HMRC and an investigation is ongoing.

Sir Keir has said he wants her back in cabinet, a view echoed by many senior colleagues.