Britain's economy contracted by 0.1% in October 2024, following a previous 0.1% growth in September, according to the Office for National Statistics (ONS).

This contraction highlights significant challenges for the Labour government in its efforts to stimulate economic growth.

The decline in GDP was primarily driven by downturns in the construction and production sectors, while the services sector remained stagnant.

ONS director Liz McKeown noted that sectors such as oil and gas extraction, pubs and restaurants, and retail experienced weak performance.

This unexpected decline complicates Labour's economic plans, especially as economists had predicted a 0.1% growth for the month.

Chancellor Rachel Reeves had previously warned about significant tax increases during her Budget announcement, which have contributed to a lack of consumer and business confidence.

In response to the proposed £40 billion in tax increases, many companies indicated intentions to reduce spending and hiring.

The GDP figures do not yet reflect the anticipated negative impact of these tax increases, which are expected to worsen economic conditions in 2025.

During the Labour Party's first 100 days in office, the services sector, the largest in Britain, showed no growth, while both production and construction industries contracted.

Investment from businesses has halted, foreign capital has diminished, and wealthy individuals have left the UK, leading to decreased consumer spending.

Moreover, GDP growth for the third quarter was also below expectations, raising concerns about the effectiveness of Labour's economic strategy.

As a result of these economic struggles, Sir Keir Starmer has had to temper his party's growth targets ahead of the next election.