The UK economy shrank 0.1 per cent in October, compounding signals that the slowdown may be more severe than previously thought. Chancellor Rachel Reeves described the surprise contraction as "disappointing" but added that the government has "put in place policies to deliver long-term economic growth".
The drop in GDP follows a 0.1 per cent fall in September and has prompted analysts at Capital Economics to note that there is now "every chance that the economy went backwards in Q4 as a whole." The Office for National Statistics said the October contraction was largely down to a decline in production output. The October figure was the first consecutive monthly fall in the GDP reading since March and April 2020. The ONS stressed that "early estimates of GDP are subject to revision".
Economists said it was difficult to assess how much of the decline was attributable to Ms Reeves's budget, which she presented at the end of October. The ONS said that some manufacturers, retailers and employment agencies had reported their turnovers had been “negatively affected” during the month. On the other hand, real estate brokers, lawyers and accountants saw an upswing in activity during October as clients made financial decisions ahead of the budget.
Consumer sentiment figures released on Friday also showed UK shoppers are unlikely to give the economy a festive boost, as they continue to rein in spending and avoid splashing out on big-ticket items in the run-up to Christmas. Research firm GfK’s sentiment indicator rose one point to minus 17, ending the year only slightly above the average reading. “In December, consumers adopted the holding pattern we’ve seen for much of 2024,” said Neil Bellamy, consumer insights director at GfK. “It’s the continuing uncharitable view on the UK’s general economic situation that’s suppressing consumer confidence.”
In November, the Bank of England trimmed its annual growth forecast for this year to 1 per cent, down from 1.25 per cent, but forecast a better 2025 with 1.5 per cent growth, as the UK economy gets a boost from the spending plans outlined in the budget. Nonetheless, business lobby groups said the increase in payroll taxes for employers in the budget would weigh on companies for some time, making growth a difficult goal.
“As we head further into the festive season, and consumer confidence remains in the doldrums, many businesses are continuing the process of updating their business plans for the coming year to accommodate significant increases in employment costs," said Anna Leach, chief economist at the Institute of Directors (IoD). "Unfortunately, as business finances have been under pressure for a considerable period, and monetary policy remains restrictive, the conditions for investment are also unfavourable."
Interest rates
All eyes now turn to the Bank of England's interest rate setting meeting next week, where analysts still believe on balance that the Monetary Policy Committee will leave rates at 4.75 per cent. "We don't think the economy is weak enough to prompt the Bank to follow November's rate cut with another cut at next Thursday's December meeting," said Paul Dales, chief UK economist at Capital Economics. "That said, we're not as confident about that as we were before this data release."
Richard Hunter, head of markets at Interactive Investor, agreed that while the likelihood of a cut to rates by the Bank of England next week was remote, "the pressure is clearly mounting for some rather more aggressive action in the New Year in the face of what has been listless economic growth".
The cost of Covid testing around the world
Egypt
Dh514 for citizens; Dh865 for tourists
Information can be found through VFS Global.
Jordan
Dh212
Centres include the Speciality Hospital, which now offers drive-through testing.
Cambodia
Dh478
Travel tests are managed by the Ministry of Health and National Institute of Public Health.
Zanzibar
AED 295
Zanzibar Public Health Emergency Operations Centre, located within the Lumumba Secondary School compound.
Abu Dhabi
Dh85
Abu Dhabi’s Seha has test centres throughout the UAE.
UK
From Dh400
Heathrow Airport now offers drive through and clinic-based testing, starting from Dh400 and up to Dh500 for the PCR test.
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Killing of Qassem Suleimani
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Tips to stay safe during hot weather
- Stay hydrated: Drink plenty of fluids, especially water. Avoid alcohol and caffeine, which can increase dehydration.
- Seek cool environments: Use air conditioning, fans, or visit community spaces with climate control.
- Limit outdoor activities: Avoid strenuous activity during peak heat. If outside, seek shade and wear a wide-brimmed hat.
- Dress appropriately: Wear lightweight, loose and light-coloured clothing to facilitate heat loss.
- Check on vulnerable people: Regularly check in on elderly neighbours, young children and those with health conditions.
- Home adaptations: Use blinds or curtains to block sunlight, avoid using ovens or stoves, and ventilate living spaces during cooler hours.
- Recognise heat illness: Learn the signs of heat exhaustion and heat stroke (dizziness, confusion, rapid pulse, nausea), and seek medical attention if symptoms occur.
Honeymoonish
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Mobile phone packages comparison
57%20Seconds
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Section 375
Cast: Akshaye Khanna, Richa Chadha, Meera Chopra & Rahul Bhat
Director: Ajay Bahl
Producers: Kumar Mangat Pathak, Abhishek Pathak & SCIPL
Rating: 3.5/5
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
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The candidates
Dr Ayham Ammora, scientist and business executive
Ali Azeem, business leader
Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
Professor Wyn Evans, astrophysicist
Dr Mark Mann, scientist
Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
More coverage from the Future Forum
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
Disability on screen
Empire — neuromuscular disease myasthenia gravis; bipolar disorder; post-traumatic stress disorder (PTSD)
Rosewood and Transparent — heart issues
24: Legacy — PTSD;
Superstore and NCIS: New Orleans — wheelchair-bound
Taken and This Is Us — cancer
Trial & Error — cognitive disorder prosopagnosia (facial blindness and dyslexia)
Grey’s Anatomy — prosthetic leg
Scorpion — obsessive compulsive disorder and anxiety
Switched at Birth — deafness
One Mississippi, Wentworth and Transparent — double mastectomy
Dragons — double amputee
Six large-scale objects on show
- Concrete wall and windows from the now demolished Robin Hood Gardens housing estate in Poplar
- The 17th Century Agra Colonnade, from the bathhouse of the fort of Agra in India
- A stagecloth for The Ballet Russes that is 10m high – the largest Picasso in the world
- Frank Lloyd Wright’s 1930s Kaufmann Office
- A full-scale Frankfurt Kitchen designed by Margarete Schütte-Lihotzky, which transformed kitchen design in the 20th century
- Torrijos Palace dome
UAE currency: the story behind the money in your pockets
Indika
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