The ONS said there had been some areas of growth during October but the reintroduction of restrictions saw large falls in hospitality “meaning the economy overall grew only modestly.”
October was the sixth consecutive month of growth for the UK after the economy contracted by 19.5% in April during the first national Coronavirus pandemic lockdown.
Output is expected to shrink again in November after England’s second national lockdown.
Derrick Dunne, CEO a discretionary fund manager Beaufort Investment, warned that the true scale of economic damage is yet to be seen and that Brexit could derail the UK’s economic recovery.
He said: “While GDP grew by 0.4% for October, in line with market expectations, this was significantly weaker than the September data. With the fears of a second wave clearly starting to feed through, there is a real danger that Brexit could derail any economic progress if it causes significant disruption to key GDP components like trade and consumer spending.
“While there has been some good news around the vaccine and restrictions easing, we simply haven't seen the true scale of the economic damage being wrought by coronavirus, lockdowns, and now sweeping job cuts. We also cannot ignore the fact that the impact on sectors such as travel and real estate will be much longer lasting than other sectors as many peoples’ fundamental way of life looks set to change.
"The OECD warned earlier this month that the UK faces a double threat from both Covid-19 and then Brexit, and so for investors that immediate outlook remains unchanged. More than ever, it is vital to stay calm, while taking steps to ensure your investment strategy is still fit for purpose in meeting your long-term goals.”