UK on the brink of recession as revised data shows economy shrank 0.1% in third quarter
22 December 2023, 07:34
The UK is on the brink of recession as revised figures from the ONS show the economy performed worse than initially thought.
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The Office for National Statistics (ONS) said that rather than remaining stagnant as originally thought, gross domestic product (GDP) fell by 0.1% between July and September, fresh data has revealed.
GDP measures the value of goods and services produced.
A recession is defined as two consecutive quarters of negative gross domestic product (GDP).
So if GDP falls in the fourth quarter estimates between October and December, which will be released in the new year, the country will officially be in recession.
The new figures also estimate the UK economy flatlined in the second quarter, compared to initial estimates which suggested an increase of 0.2%.
In a statement, the ONS said: “In output terms, there was a 0.2% fall in the services sector in the latest quarter, which offset a 0.4% increase in construction output and a 0.1% increase in the production sector.”
Industries including film production, engineering and design and telecommunications showed a weaker performance during the third quarter than the ONS initially thought.
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GDP is estimated to have fallen by 0.1% in Quarter 3 (July to Sept) 2023, revised down from the previous estimate of no growth.
— Office for National Statistics (ONS) (@ONS) December 22, 2023
Meanwhile GDP is now estimated to have shown no growth in Q2, revised down from the previous estimate of +0.2% growth.
➡️ https://t.co/KjTIdncntf pic.twitter.com/xb7H0dRZKD
Darren Morgan, director of economic statistics at the ONS, said: "The latest data from both our regular monthly business survey and VAT returns show the economy performed slightly less well in the last two quarters than our initial estimates.
"The broader picture, though, remains one of an economy that has been little changed over the last year."
Chancellor Jeremy Hunt said of the revised figures: “The medium-term outlook for the UK economy is far more optimistic than these numbers suggest."
It comes after the UK saw a bigger-than-expected fall in inflation from 4.6% to 3.9% in November.
That means that while prices are still going up, they are being hiked at a much slower rate than levels of 11.1% recorded in October last year.
