The figures come as a setback for the new Labour government and its pro-growth agenda.
The UK economy shrank by 0.1% in October, following a contraction of the same scale in September, said the Office for National Statistics on Friday.
The figures mark the first back-to-back fall since March and April 2020, when the UK entered its first COVID-19 lockdown.
Economists polled by Reuters had expected a 0.1% gain.
The services sector showed no growth, while output in the manufacturing and construction industries fell in October.
The news comes as a setback for the new Labour government, who have put economic growth at the heart of their political campaign.
Since the July election, finance minister Rachel Reeves has tried to moderate short-term aspirations.
When unveiling her budget in October, she warned of an economic “black hole” left by the previous government.
“While the figures this month are disappointing, we have put in place policies to deliver long-term economic growth,” Reeves said in a statement on Friday.
With roots in trade union movements, the Labour Party under Prime Minister Keir Starmer has been working to prove itself as a business-friendly government.
Politicians will now face an uphill battle to get some of these business leaders back on side – particularly as national insurance costs rise for employers.
There are also concerns that the hike in employer tax could be passed on to employees if businesses cut back on hiring.
“The contraction in October will be concerning for the new Government as it offers a stark reflection of the hit to the economy from the uncertainty running up to the Budget, when consumers and businesses descended into a state of panic over what measures the Chancellor might deliver,” said Alice Haine, Personal Finance Analyst at Bestinvest by Evelyn Partners.
“While the Government was keen to highlight its efforts to shield working people from higher taxes, the fallout from the measures imposed on businesses could have even bigger consequences for workers,” she added.
Job vacancies notably plummeted in November, falling at the fastest rate since the start of the pandemic.
According to the OECD, growth forecasts for next year are nonetheless set to be stronger for the UK than the eurozone.
The group predicts UK growth at 1.7% in 2025, compared to a eurozone forecast of 1.3%.
High borrowing costs have constrained spending across both regions, although interest rates are now on a downward trajectory.
