Uk On Brink Of Recession After Economy Shrank 0.2 In Third Quarter

Huw Fairclough | News Getty Images | Getty Images LONDON — The UK economy shrank by 0.2% in the third quarter of 2022, signaling what could be the start of a long recession. The preliminary estimate shows the economy performed better than expected in the third quarter, despite the recession. Economists had forecast a 0.5% contraction, according to Refinitiv. The contraction does not yet represent a technical recession — marked by two consecutive quarters of negative growth — after the second quarter’s 0.1% contraction was revised up to 0.2%. “In terms of output, there was a slowdown in the quarter for the services, manufacturing and construction sectors; the services sector slowed to flat output in the quarter due to a fall in consumer-facing services, while the manufacturing sector fell by 1.5 % in Q3 2022, including declines in all 13 manufacturing sub-sectors,” the Office for National Statistics said in its report on Friday. The Bank of England last week forecast the country’s biggest recession since records began, suggesting the recession that began in the third quarter is likely to last deep until 2024 and push unemployment to 6.5% over the next two years. . The country is facing a historic cost-of-living crisis, fueled by a squeeze on real incomes from rising energy and commodity prices. The central bank recently imposed its biggest rate hike since 1989 as policymakers try to tame double-digit inflation. The ONS reported that the level of quarterly GDP in the third quarter was 0.4% lower than its pre-Covid level in the final quarter of 2019. Meanwhile, figures for September, when UK GDP fell by 0.6%, affected by the holiday for Queen Elizabeth II’s state funeral. UK Chancellor of the Exchequer Jeremy Hunt will next week announce a new fiscal policy agenda, which is expected to include major tax increases and spending cuts. Prime Minister Rishi Sunak warned that “difficult decisions” would need to be made to stabilize the country’s economy. “While some inflation numbers may start to look better going forward, we expect prices to remain high for some time, adding more pressure to demand,” said George Lagarias, chief economist at Mazars. “If next week’s Budget does prove to be ‘tough’ on taxpayers as expected, consumption is likely to be further constrained and the Bank of England will have to start looking at the impact of a demand shock on the economy.” This is breaking news and will be updated soon

title: “Uk On Brink Of Recession After Economy Shrank 0.2 In Third Quarter " ShowToc: true date: “2022-12-14” author: “Janet Bell”

Huw Fairclough | News Getty Images | Getty Images LONDON — The UK economy shrank by 0.2% in the third quarter of 2022, signaling what could be the start of a long recession. The preliminary estimate shows the economy performed better than expected in the third quarter, despite the recession. Economists had forecast a 0.5% contraction, according to Refinitiv. The contraction does not yet represent a technical recession — marked by two consecutive quarters of negative growth — after the second quarter’s 0.1% contraction was revised up to 0.2%. “In terms of output, there was a slowdown in the quarter for the services, manufacturing and construction sectors; the services sector slowed to flat output in the quarter due to a fall in consumer-facing services, while the manufacturing sector fell by 1.5 % in Q3 2022, including declines in all 13 manufacturing sub-sectors,” the Office for National Statistics said in its report on Friday. The Bank of England last week forecast the country’s biggest recession since records began, suggesting the recession that began in the third quarter is likely to last deep until 2024 and push unemployment to 6.5% over the next two years. . The country is facing a historic cost-of-living crisis, fueled by a squeeze on real incomes from rising energy and commodity prices. The central bank recently imposed its biggest rate hike since 1989 as policymakers try to tame double-digit inflation. The ONS reported that the level of quarterly GDP in the third quarter was 0.4% lower than its pre-Covid level in the final quarter of 2019. Meanwhile, figures for September, when UK GDP fell by 0.6%, affected by the holiday for Queen Elizabeth II’s state funeral. UK Chancellor of the Exchequer Jeremy Hunt will next week announce a new fiscal policy agenda, which is expected to include major tax increases and spending cuts. Prime Minister Rishi Sunak warned that “difficult decisions” would need to be made to stabilize the country’s economy. “While some inflation numbers may start to look better going forward, we expect prices to remain high for some time, adding more pressure to demand,” said George Lagarias, chief economist at Mazars. “If next week’s Budget does prove to be ‘tough’ on taxpayers as expected, consumption is likely to be further constrained and the Bank of England will have to start looking at the impact of a demand shock on the economy.” This is breaking news and will be updated soon