Economy went into reverse over the summer time shrinking by 0.1%

The economic system went into reverse over the summer time, in keeping with grim new figures that elevate fears of a recession.

GDP fell by 0.1 per cent between July and September, worse than the flatlining that had beforehand been estimated.

Meanwhile the revised numbers from the Office for National Statistics (ONS) confirmed that there was no development within the second quarter, in comparison with the 0.2 per cent it had initially detected. 

After exercise was projected to have slipped into the pink in October it can gas considerations of a technical recession – outlined as two consecutive quarters of contraction. 

But Jeremy Hunt tried to place a courageous face on the numbers, saying the medium-term outlook was ‘much more optimistic’ with inflation falling. 

The Chancellor has additionally hinted that falling inflation and rates of interest may give him extra scope to chop taxes. 

GDP fell by 0.1 per cent between July and September, worse than the flatlining that had beforehand been estimated 

Jeremy Hunt tried to place a courageous face on the numbers, saying the medium-term outlook was ‘much more optimistic’ with inflation falling

ONS director of financial statistics Darren Morgan mentioned: ‘The newest information from each our common month-to-month enterprise survey and VAT returns present the economic system carried out barely much less effectively within the final two quarters than our preliminary estimates.

‘The broader image, although, stays one among an economic system that has been little modified over the past yr.

‘The newest VAT information, which takes slightly time to obtain and course of means we now estimate the economic system confirmed no development within the second quarter, with weaker performances from smaller companies, significantly these in each hospitality and IT than first proven.

‘We additionally now estimate the economic system contracted barely within the third quarter, once we beforehand reported no development, with later returns from our enterprise survey exhibiting movie manufacturing, engineering & design and telecommunications all performing slightly worse than we initially thought.’

Mr Hunt mentioned: ‘The medium-term outlook for the UK economic system is way extra optimistic than these numbers counsel.

‘We’ve seen inflation fall once more this week, and the OBR (Office for Budget Responsibility) expects the measures within the autumn assertion, together with the most important enterprise tax minimize in fashionable British historical past and tax cuts for 29 million working individuals, will ship the most important increase to potential development on document.’

Analysts mentioned ‘the mildest of delicate recessions’ may need began within the third quarter. 

A spokesman for Capital Economics mentioned: ‘Whether or not there’s a small recession, the large image is that we count on actual GDP development to stay subdued all through 2024.’ 

Mr Hunt pointed to a pointy fall in inflation introduced earlier this week, which has sparked hopes that rates of interest might begin to come down quickly