The UK economy contracted by more than initially estimated in the third quarter of this year.
Gross domestic product (GDP), the value of all goods and services produced in the country, fell by a revised 0.3% from an initially forecast fall of 0.2% from July to September, the Office for National Statistics said.
The official definition of a recession is two consecutive quarters of negative growth. This will happen if the economy also contracts in the fourth quarter of this year.
The manufacturing and construction sectors performed worse than initially thought.
Manufacturing activity shrank 2.8%, worse than the 2.3% contraction reported earlier, while construction activity actually shrank 0.2% instead of the 0.6% increase that was reported in November.
Electricity production was also described as “significantly weaker” by the director of economic statistics at the ONS.
Household incomes continued to fall, although the rate of decline slowed compared to the first two quarters of 2022, and household spending fell for the first time since the last spring lockdown in 2021.
Household disposable income fell 0.5% in the quarter, the fourth straight decline.
Household spending fell by a revised 1.1 percent in the quarter, as spending on tourism, transportation, household goods and services, and food and beverage spending fell.
The past year has seen a slowdown in real consumption spending, including in restaurants and hotels, as well as leisure and culture as a result of reduced disposable income and a cost-of-living crisis fueled by high inflation.
The figures are due to 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, least of all Britain.”
“Getting prices down so people’s wages rise is my top priority, which is why we’re holding down energy bills this winter and providing extra living wage payments for the most vulnerable,” he added.
“To get Britain’s economy back on track, we have a plan to help more than halve inflation next year, while laying the foundations for long-term growth through record investment in infrastructure and new industries.”
Many believe that the UK economy is already in recession. Groups such as the Confederation of British Industry (CBI) forecast the economy to contract by 0.4% next year.
But the first month of the last quarter of this year showed growth. Growth of 0.5% was recorded in October, ONS data showed. That was a better performance than economists had expected and was explained by the number of working days returning to normal rather than any real jump in output.
It is still expected to be confirmed that the economy is entering recession at the end of the year, as the quarter as a whole is forecast to see negative growth.
It is expected to perform the worst of any other G-7 country, which forms the group of the world’s largest industrialized democracies, according to forecasts by the Organization for Economic Co-operation and Development (OECD).
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