UK at risk of recession after economy shrinks in third quarter

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Fears that the UK has fallen into recession have been heightened after official figures were revised to show that the economy shrank slightly in the July to September period.

Article originally published by The Guardian. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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22 Dec 2023

The assessment that gross domestic product (GDP) fell by 0.1% in the third quarter – down from the previous estimate of no growth – will be a blow to Rishi Sunak, who has promised to get the economy growing as one of his fives pledges to voters before an expected general election next year.

The Office for National Statistics (ONS) said a poorer than previously assessed performance by small companies, film production, engineering and design and telecommunication and the IT sector accounted for much of the revision.

GDP for the second quarter was also revised down to zero growth, from a previous estimate of 0.2% expansion.

The Bank of England’s 14 interest rate rises over the last two years, taking the cost of borrowing from 0.1% to 5.25%, are also expected to have taken a bigger toll on the corporate sector and household spending than previously thought.

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