UK economy shrinks by more than first thought in the third quarter of this year Business News

The UK economy contracted by more than first estimated in the third quarter of this year.

Gross domestic product (GDP), the value of all the goods and services produced in the country, fell by a revised 0.3% against the 0.2% decline 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. It would happen if the economy also contracted in the fourth quarter of this year.

The manufacturing and construction sectors performed worse than originally thought.

Manufacturing activity contracted 2.8%, worse than the 2.3% contraction previously announced, while construction activity actually shrank 0.2% rather than grew 0.6%, which had been recorded in November.

Electricity generation too was described as “notably weaker” by the director of economic statistics at the ONS.

Household income continued to fall, though the rate of decline slowed compared to the first two quarters of 2022 and household spending fell for the first time since the final spring lockdown of 2021.

The amount of households’ disposable income fell by 0.5% in the quarter, the fourth consecutive drop.

Household spending fell by a revised 1.1% in the quarter as declines in tourism, transport, household goods and services, and food and drink spending were seen.

A slowing in real consumption expenditure was seen over the past year including in restaurants and hotels, recreation and culture as a result of that reduced disposable income and the cost of living crisisfueled by highinflation.

Many believe the UK economy to already be in recession. Groups such as the Confederation of British Industry (CBI) have forecast the economy to contract 0.4% next year.

But the first month of the final quarter of this year showed growth. Growth of 0.5% was recorded in October, ONS figures showed. It was a stronger performance than expected by economists and was explained by the number of working days returning to normal rather than any real surge in output.

The economy is still expected to be confirmed as entering a recession at the end of the year as the quarter as a whole is forecast to have experienced negative growth.

It’s expected to be the worst Performing more than any of the other G7 countries that form the group of the world’s largest industrialized democracies, according to forecasts from the Organization for Economic Cooperation and Development (OECD).

Leave a Comment

Your email address will not be published. Required fields are marked *