8:37 am, November 11, 2022
The UK’s economy shrank by 0.2 per cent between July and September.
The Bank of England has said the UK could already be at the beginning of the longest recession since the 1920s.
The Office for National Statistics said gross domestic product (GDP) fell 0.6 per cent in September, in part due to the Queen’s funeral.
The September figure was worse than expected – analysts had forecast a 0.5 per cent drop.
It added to a 0.2 per cent drop for the full quarter – lower than had been expected as the ONS revised its estimates for July and August.
The ONS changed its readings for August and July, helping for the quarter as a whole. The economy was previously thought to have shrunk by 0.3 per cent in August but that was revised to 0.1 per cent.
In July the economy had previously thought to have risen by 0.1 per cent – the ONS changed that to 0.3 per cent.
The reading comes just a week after the Bank of England published a caveated forecast that the UK might be headed for an eight-quarter recession – the longest consecutive recession since reliable records began in the 1920s.
But the Bank said that this would only happen if it raises interest rates to around 5.2 per cent.
It said it did not expect rates to reach such a high level, which would imply that the recession could be less drawn out.
ONS director Darren Morgan said: ‘With September showing a notable fall partly due to the effects of the additional bank holiday for the Queen’s funeral, overall the economy shrank slightly in the third quarter.
‘The quarterly fall was driven by manufacturing, which saw widespread declines across most industries.
‘Services were flat overall, but consumer-facing industries fared badly, with a notable fall in retail.’
Recently, Waylands Automotive CEO John O’Hanlon told Car Dealer he was already preparing his car dealership business for a recession.
The boss of the Volvo and Kia group told Car Dealer Live that as the UK heads towards a contraction in growth he is busy laying the groundwork to see his firm through it.
‘I think we are headed for a recession,’ he explains in a video interview you can watch below.
‘And I’m not really sure there’s a lot we can do about it.
‘We’ve got to actually make sure our businesses are best placed.
‘We’re spending a lot of time looking at how we market to our customers, making sure that we’re absolutely sending the right messages, making sure those customers are aware of what product we’ve got.’
Additional reporting: PA Media
