UK economy shrank faster than was initially thought during the third quarter
The latest figures released by the Office for National Statistics on Thursday showed a grim future of The U.K. economy, which has been shown to have contracted by more than initially predicted between the months of July between July and September.
Gross domestic product decreased by an estimated 0.3 percent during the 3rd quarter 2022 in contrast to the expected 0.2 percent decline due to business investment performing less than expected. The growth figures for the first second quarter of 2022 also reduced, with the figures which show that the UK only managed to grow by 0.6 percent in the initial quarter, and 0.1 percent in the second quarter.
The ONS added that the GDP figure is now believed to be 0.8 percent lower than pre-pandemic levels which is a reduction from a previous estimation of 0.4 percent lower.
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“Our revised figures show the economy performed slightly less well over the last year than we previously estimated, with manufacturing and electricity generation notably weaker,” said Darren Morgan, director of economic statistics at the ONS.
#Breaking The UK economy shrank slightly more than first thought in the third quarter of the year.
The Office for National Statistics says it contracted by 0.3%, instead of 0.2%. pic.twitter.com/cbjZdvqL1e— Greatest Hits Radio South Coast News (@GHR_SouthCoast) December 22, 2022
The next few months are very grim, considering experts believe that the economy will shrink further during the last quarter of 2022. This will have the U.K. fall into recession which occurs where the economy shrinks for two quarters consecutively with predictions that it could experience smaller contractions in two quarters in 2023’s first as well as second.
The impact is already affecting the consumer hard and household spending has dropped by 1.1 percent following the increase in inflation over the third quarter, the first decline since the period from January to March 2021, during which there was a lockdown in the U.K. was under lockdown.
“Household incomes continued to fall in real terms, albeit at a slower rate than in the previous two quarters,” Morgan said.
In comparison to other advanced economies The U.K. is faring especially badly.
“The national accounts confirm that the U.K. was the only G-7 economy in which third-quarter GDP still was below its pre-COVID level,” said Samuel Tombs of Pantheon Macroeconomics.
“Looking ahead, the U.K. likely will continue to underperform; we expect Britain to suffer the deepest recession among major advanced economies in 2023.”
