Experts are warning of the longest receission since records began after the UK’s economy shrunk between July and September.
The Office for National Statitistics (ONS) said that gross domestic product (GDP) had fallen by 0.6% in September, they say in part due to the Queen’s funeral.
It added that between July and September the UK’s economy had fallen by 0.2%, lower than had been expected in the revised estimates made by the ONS in August.
“With September showing a notable fall partly due to the effects of the additional bank holiday for the Queen’s funeral, overall the economy shrank slightly in the third quarter,” said ONS director of economic statistics Darren Morgan.
“We are not immune from the global challenges of high inflation & slow growth largely driven by Putin’s illegal war in Ukraine and his weaponisation of gas supplies”.
Chancellor @Jeremy_Hunt responds to today’s GDP statistics from the @ONS. pic.twitter.com/me9Rt54f59
“The quarterly fall was driven by manufacturing, which saw widespread declines across most industries.
“Services were flat overall, but consumer-facing industries fared badly, with a notable fall in retail.”
It could be the beginning of a recession – which is defined as two quarters of shrinking GDP in a row.
The reading comes just a week after the Bank of England published a caveated forecast that the UK might be headed for an eight-quarter recession – the longest consecutive recession since reliable records began in the 1920s.
However, the Bank cautioned that this would only happen if it raises interest rates to around 5.2% – which the market was expecting at the time.
It said it did not expect rates to reach such a high level, which would imply that the recession could be less drawn out.
NEW: GDP figures show UK economy shrank by 0.2% in the third quarter.
This is extremely worrying – and is another page of failure in the Tories’ record.
Britain has so much potential to grow.
Labour’s Green Prosperity Plan and our partnership with business will unlock that.
Chancellor Jeremy Hunt said: “We are not immune from the global challenge of high inflation and slow growth largely driven by Putin’s illegal war in Ukraine and his weaponisation of gas supplies.
“I am under no illusion that there is a tough road ahead – one which will require extremely difficult decisions to restore confidence and economic stability.
“But to achieve long-term sustainable growth, we need to grip inflation, balance the books and get debt falling. There is no other way.”
Shadow chancellor Rachel Reeves said the latest GDP figures were “extremely worrying”.
The Labour MP said: “Today’s numbers are another page of failure in the Tories’ record on growth, and the reality of this failure is family finances crunched, British businesses left behind and more anxiety for the future.
“We’re already set to be near the bottom of global league tables on growth, but all the Tories offer yet again is austerity.
“Britain has so much potential to grow. We have the talent. We have the capacity.”
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