The UK economy contracted more than expected in the third quarter of this year.
Gross domestic product (GDP), the value of all goods and services produced domestically, fell by a revised 0.3% from a decline of 0.2% initially estimated from July to September, the Office for National Statistics said.
The official definition of a recession is two consecutive quarters of negative growth. This would happen if the economy also contracted in the fourth quarter of this year.
The manufacturing and construction sectors did less well than initially thought.
Manufacturing activity contracted 2.8%, worse than the 2.3% contraction previously reported, while construction activity actually fell 0.2% instead of growing 0.6 %, which was recorded in November.
Power generation was also described as “significantly weaker” by the ONS director of economic statistics.
Household incomes continued to decline, although the rate of decline slowed from the first two quarters of 2022 and household spending fell for the first time since the last lockdown in spring 2021.
The amount of household disposable income fell 0.5% in the quarter, the fourth straight decline.
Household spending fell 1.1% (revised revision) in the quarter, due to declines in tourism, transportation, household goods and services, and spending on food and beverages.
A slowdown in real consumer spending has been observed over the past year, particularly in restaurants and hotels, as well as in recreation and culture, due to this reduction in disposable income and cost of living crisispowered by high inflation.
The figures were blamed on high inflation caused by the invasion of Ukraine, said Chancellor of the Exchequer Jeremy Hunt.
“The high inflation caused by Putin’s invasion of Ukraine is slowing economic growth around the world. No country is immune, let alone Britain.”
“Bringing prices down so people’s wages go up is my top priority, which is why we’re keeping energy bills down this winter and providing additional cost-of-living payments to the most vulnerable,” he said. he adds.
“To get the UK economy back on track, we have a plan that will help cut inflation by more than half next year, while laying the foundations for long-term growth through record investment in infrastructure and new industries.
Many believe that the British economy already be in a recession. Groups such as the Confederation of British Industry (CBI) predicted that the economy contract 0.4% Next year.
But the first month of the last quarter of this year showed growth. 0.5% growth was recorded in October, according to ONS figures. This is a stronger performance than expected by economists and is explained by the return to normal of the number of working days rather than by a real increase in production.
The economy is still expected to confirm itself as entering recession at the end of the year, as the quarter as a whole is expected to have seen negative growth.
It is should be the worst outperforming any of the other G7 countries that make up the group of largest industrialized democracies in the world, according to forecasts by the Organization for Economic Co-operation and Development (OECD).
