The UK economy is showing the first signs of a recession to come, as it contracted by 0.2 percent in the third quarter of this year, official figures show. The Office for National Statistics (ONS) reported national output had taken a hard dip in September, leaving the period of July-September in overall negative growth.
Growth fell by 0.6 percent in September, which the ONS attributed in part to the state funeral for Queen Elizabeth II and slow or flat production output as consumer spending contracted.
A recession is only officially declared when there have been two consecutive quarters of negative growth – however, this is widely expected to occur by the end of the year.
Britain’s gloomy economic outlook pushed the Bank of England to state last week that the country was already in recession.
It said there was a scenario it was anticipating in which the UK remained in recession for the next two years.
Warning that unemployment could double by 2025, BoE chief Andrew Bailey said Britons should expect a “tough road ahead”.
Raising interest rates to 3 percent, he said the Bank was acting forcefully now otherwise the situation “will be worse later on”.
Soaring inflation has been spurred on by higher energy and food prices – in part caused by the war in Ukraine, leaving many households facing hardship.
The announcement of the figures comes less than a week before Chancellor Jeremy Hunt outlines Rishi Sunak’s vision for the economy.
More to follow…