UK economy contracts by more than expected
- last year
The value of all goods and services produced in the nation, or the gross domestic product, decreased by a revised 0.3% from July to September, according to the Office for National Statistics.
Two consecutive quarters of negative growth constitute a recession, according to official definitions. If the economy also shrank in the last quarter of this year, it would take place.
Contrary to initial estimates, the manufacturing and construction industries underperformed.
Construction activity actually decreased by 0.2% rather than growing by 0.6% as had been reported in November, while manufacturing activity decreased by 2.8%, worse than the previously reported 2.3% decline.
The director of economic statistics at the ONS also referred to electricity generation as being "significantly weaker."
Household spending decreased for the first time since the final spring lockdown of 2021 while household earnings continued to shrink, but at a slower rate than in the first two quarters of 2022.
For the fourth quarter in a row, households' discretionary income decreased by 0.5%.
Spending on travel, transportation, home goods and services, as well as on food and drink, decreased during the third quarter, with household spending down by a revised 1.1%.
As a result of this decreased disposable income and the cost of living crisis, which is being fueled by rising inflation, a slowdown in real consumption spending was observed during the last year, especially in restaurants and hotels, as well as in recreation and culture.
According to Chancellor of the Exchequer Jeremy Hunt, the invasion of Ukraine was to blame for the high inflation rates.
Two consecutive quarters of negative growth constitute a recession, according to official definitions. If the economy also shrank in the last quarter of this year, it would take place.
Contrary to initial estimates, the manufacturing and construction industries underperformed.
Construction activity actually decreased by 0.2% rather than growing by 0.6% as had been reported in November, while manufacturing activity decreased by 2.8%, worse than the previously reported 2.3% decline.
The director of economic statistics at the ONS also referred to electricity generation as being "significantly weaker."
Household spending decreased for the first time since the final spring lockdown of 2021 while household earnings continued to shrink, but at a slower rate than in the first two quarters of 2022.
For the fourth quarter in a row, households' discretionary income decreased by 0.5%.
Spending on travel, transportation, home goods and services, as well as on food and drink, decreased during the third quarter, with household spending down by a revised 1.1%.
As a result of this decreased disposable income and the cost of living crisis, which is being fueled by rising inflation, a slowdown in real consumption spending was observed during the last year, especially in restaurants and hotels, as well as in recreation and culture.
According to Chancellor of the Exchequer Jeremy Hunt, the invasion of Ukraine was to blame for the high inflation rates.