UK economy performs worse than initial estimates in last two quarters

UK economy performs worse than initial estimates in last two quarters

LONDON: The UK economy shrank between July and September, raising the risk of the country dipping into a recession, according to revised official figures. Gross domestic product (GDP) fell by a revised 0.1 per cent against the zero growth initially estimated, the Office for National Statistics (ONS) said, reported PA Media/dpa.

It also flatlined during the second quarter of the year, after prior estimates showed 0.2 per cent growth, painting a bleaker picture for the economy. Industries including film production, engineering and design and telecommunications showed a weaker performance during the third quarter than the ONS initially thought.

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 the economic outlook should not be dampened by the worse-than-expected figures.

He said: “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.”

The revised figures come after the ONS said the economy shrank by 0.3 per cent during October.

If GDP falls between October and December then it puts the economy at risk of falling into a recession, which can be defined as two consecutive quarters of negative growth.
Prime Minister Riski Sunak had pledged at the start of 2023 to “grow the economy”.

Labour shadow chancellor Rachel Reeves said the revised GDP figures show he has failed to meet his promise. She said: “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.”

–BERNAMA-PA Media/dpa

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