Published: December 23, 2023 12:29 pm
Author: RT
Revised official statistics show a GDP contraction in the third quarter
Britain’s economy unexpectedly contracted in the third quarter of the year, raising the possibility that the country is already in a recession, the latest data shows.
Third quarter GDP dropped 0.1% from the previous quarter after initial estimates suggested growth had been flat, according to a revised report by the Office for National Statistics (ONS) released on Friday. The ONS also downgraded its GDP figure for the second quarter, saying there was no growth between April and June, compared to the 0.2% expansion previously estimated.
According to the report, the fall in GDP was due to the struggling services sector, which accounts for four-fifths of UK output. Services fell 0.2%, more than offsetting growth of 0.4% in construction and 0.1% in production. Economists say the revision to the third quarter puts the UK at risk of a technical recession, which is typically defined as two quarters or more of falling GDP. Data shows that output decreased 0.3% in October on a month-on-month basis, putting the economy on track to shrink in the fourth quarter.
“The mildest of mild recessions may have begun in the third quarter,” Capital Economics analyst Ashley Webb was quoted as saying by Bloomberg. “Looking ahead, the latest activity surveys point to weak GDP growth in the fourth quarter too,” he added.
READ MORE: British economic contraction worse than expected
Separate data from the ONS showed that retail sales grew by more than expected last month, with trading boosted by earlier-than-usual and wider Black Friday discounts. Meanwhile, experts say revised GDP figures could increase the pressure on the Bank of England, prompting it to start cutting rates again. The regulator had earlier projected a 50% chance of a recession in the second half of the year.
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