In the three months leading up to October, the British economy shrunk by 0.3%, but the monthly number for September showed a little improvement due to the impact of the extra bank holiday for the queen's death.

The Office for National Statistics said that the gross domestic product increased by 0.5% between September and October, following a 0.6% decline the previous month.

This rebound exceeded experts' expectations and was the largest monthly expansion in nearly a year.

Director of economic statistics at the ONS, Darren Morgan, stated: "The economy rebounded in October, recovering from the impact of the extended bank holiday for the state funeral.

"In particular, automobile sales rebounded in October after a very weak September, while the health sector also had a great month, with GP appointments, accidents, emergency attendance, and the Covid-19 autumn booster program all contributing to the industry's growth.

"Construction continued its upward trend over the past year and is now at a record high, with new home construction driving growth this month.

"However, throughout the course of the last three months as a whole, the economy contracted, with declines in manufacturing and services."

Predicted bounce

Economists foresee a protracted, albeit relatively modest, recession for the British economy, as the current period of calm is not expected to endure.

According to Yael Selvin, KPMG UK's chief economist, stretched household incomes may result in prolonged declines in consumer expenditure over the next year.

"The rebound in retail spending could be temporary, resulting in another poor holiday season."

Chancellor of the Exchequer Jeremy Hunt stated, "While today's numbers indicate modest growth, I want to be honest and say that the road ahead is arduous."

"Our strategy has restored economic stability and will help reduce inflation next year, while also laying the groundwork for long-term prosperity through record-breaking investments in new infrastructure, science, and innovation."

The opposition Labour Party rejected the monthly increase as a mere blip and questioned the actions of the government.

Rachel Reeves, the shadow chancellor, stated, "Today's data highlight the failure of this Conservative government to expand our economy, leaving us lagging behind on the world stage."

"A choice is available. We can continue along the path of managed decline, slipping further behind our rivals, or we can employ innovative strategies to move us forward."

In the meantime, business groups stated that the October statistic was predicted and urged the British government to focus on combating high inflation, low productivity, and dwindling corporate investment.

As 2023 approaches, the government must decide between action and inaction, according to Alpesh Paleja, the Chief Economist at the Confederation of British Industry.

"The Prime Minister and Chancellor must employ growth levers not only to mitigate the severity of an impending recession, but also to address the pervasive weakness in investment and productivity. We cannot afford another decade of stagnant growth and inflation."

When they announce their next decision on interest rates on Thursday, members of the Bank of England's Monetary Policy Committee will have the continued weakness of the British economy in mind.

Kitty Ussher, the chief economist at the Institute of Directors, stated, "Overall, today's data do not change the image of a declining economy."

"Taking a three-month perspective, the economy shrunk by 0.3% from August to October.

This longer-term pattern will have a greater impact on the Monetary Policy Committee when it meets on Thursday to determine if it is appropriate to halt the rate of interest rate increases.