This Fall Signs the Start of a Recession in the UK


 The UK economy contracted in the third quarter, marking the start of what the Bank of England (BOE) expects will be a prolonged recession.

The latest data from the Office for National Statistics (ONS) saw gross domestic product (GDP) fall 0.2% in the third quarter, down from 0.2% growth in the previous quarter but better than expectations for a 0.5% decline.

This makes the UK the only G7 economy yet to fully recover from Covid-19 with output 0.4% below pre-pandemic levels.

In fact, in September alone GDP fell 0.6% a string of extra public holidays for the mourning period and the funeral of Queen Elizabeth II saw a fall in consumer spending and business investment.

Households and businesses now face the risk of two bleak years as the BOE and government try to tackle inflation by tightening policy at the same time.

The BOE, which has raised interest rates eight times since December, says the recession is a necessary impact to control inflation.

The central bank predicts this downturn will be the longest since the Great Depression of the early 1930s.

Meanwhile, Prime Minister Rishi Sunak is preparing to announce tax hikes and spending cuts next week.