The UK has moved nearer to falling into recession after revised figures confirmed the economic system carried out worse than beforehand thought.
Gross home product (GDP) – which is a measure of the scale and well being of the economic system – has been downgraded for the three months from July to September. New figures launched right now by the Office for National Statistics (ONS) present GDP contracted by 0.1% – earlier estimates proven it had been flat.
A recession is outlined as two consecutive quarters – so two three-month intervals – of damaging development. The UK will formally be in recession if the ultimate knowledge for October to December 2023 reveals the economic system has contracted.
This knowledge shall be launched by the ONS subsequent yr. Earlier this month, the ONS stated the economic system was estimated to have shrank by 0.3% throughout October.
The newest figures launched right now additionally confirmed there was zero development between April and June, after GDP was first thought to have elevated by 0.2%. Labour shadow chancellor Rachel Reeves stated the revised GDP figures present Prime Minister Rishi Sunak has failed to fulfill his promise to “grow the economy”.
She stated: “Rishi Sunak is a Prime Minister whose legacy is one of failure. He failed to beat Liz Truss, he failed to cut waiting lists, he failed to stop the boats and now he has failed to grow the economy. Thirteen years of economic failure under the Conservatives have left working people worse off with higher bills, higher mortgages and higher prices in the shops.”
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Chancellor Jeremy Hunt stated, “The medium-term outlook for the UK economy is far more optimistic than these numbers suggest. We’ve seen inflation fall again this week, and the OBR [Office for Budget Responsibility] expects the measures in the Autumn Statement, including the largest business tax cut in modern British history and tax cuts for 29 million working people, will deliver the largest boost to potential growth on record.”
Darren Morgan, director of financial statistics on the ONS, stated GDP was downgraded for July to September as common month-to-month enterprise survey and VAT returns confirmed much less spending. He defined: “The newest knowledge from each our common month-to-month enterprise survey and VAT returns present the economic system carried out barely much less properly within the final two quarters than our preliminary estimates. The broader image, although, stays considered one of an economic system that has been little modified over the past yr.
“The newest VAT knowledge, 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, notably these in each hospitality and IT than first proven. We additionally now estimate the economic system contracted barely within the third quarter, after we beforehand reported no development, with later returns from our enterprise survey displaying movie manufacturing, engineering & design and telecommunications all performing slightly worse than we initially thought.”