THE UK is at risk of falling into a recession after revised official figures show the economy declined between July and September.
Gross domestic product (GDP) fell by a revised 0.1% against the zero growth initially estimated, the Office for National Statistics (ONS) said.
It also flatlined during the second quarter of the year, after prior estimates showed 0.2% growth, painting a bleaker picture for the overall economy.
The changed figures come after the ONS said GDP declined by 0.3% during October, a worse reading than economists had predicted.
READ MORE: UK forecast for second-worst economic growth in the G7
If GDP contracts between October and December then the economy will have entered a technical recession, which can be defined as two consecutive quarters of negative growth.
Industries including film production, engineering and design and telecommunications showed a weaker performance during the third quarter than statisticians 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 (below) 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.”
Prime Minister Rishi 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.”
Richard Carter, head of fixed interest research at Quilter Cheviot, said: “Growth is weakening and interest rates are really beginning to bite, and while a recession has just been avoided to date, there is no guarantee one will be avoided in 2024.”
He added that “Rishi Sunak’s pledge to grow the economy is now severely in doubt”.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel