DOWNING STREET denied Britain is on a “recession-watch” after official figures today revealed a surprise fall in GDP in the run-up to the Budget.

Chancellor Rachel Reeves came under further pressure after the Office for National Statistics (ONS) showed a 0.1 per cent drop in the three months to October.

Pre-Budget worries and tax-hike speculation have been widely blamed for an unexpected contraction in the economy.

Most economists had been expecting a rise of 0.1 per cent for October on hopes of a manufacturing bounce-back led by Jaguar Land Rover’s (JLR) recovery from a major cyber attack.

TUC general secretary Paul Nowak warned consumer spending is “still very weak” as he called for the Bank of England to deliver further interest rate cuts.

“The government acted to boost household incomes at the Budget — it raised minimum wage, benefiting millions across the country, cut child poverty and funded energy payments to support living standards,” he added.

“The Bank of England should now recognise the impact that the living standards crisis has had on families’ and businesses’ finances and spending — and must deliver further cuts in interest rates next week.” 

Unite general secretary Sharon Graham said: “The latest figures reflect the low-investment, low-growth doom loop that still defines the UK economy.

“We desperately need more government investment and joined-up thinking on industry to create jobs and to raise GDP. Last month’s Budget was a wasted opportunity to deliver on that.

“Other advanced economies invest much more than us and we simply can’t afford to be left further behind.”

The ONS said gross domestic product (GDP) fell as car manufacturing activity only made a “slight” recovery from the woes at JLR, with the services sector weighed down as consumers held back spending on the high street before the Budget, delivered on November 26.

The data shows the economy has now not grown since June, with GDP either flat or falling in the past four months.

Speaking to reporters, Sir Keir Starmer’s official spokesman rejected suggestions the country is on “recession watch” insisting “these are monthly figures.”

He added that there was “more to do” and the government was investing billions, encouraging private investment and reforming the planning system to make it easier to build.