UK at risk of recession after economy shrinkson December 22, 2023 at 8:43 am

The UK is at risk of recession after revised figures showed the economy shrank between July and September.

Gross domestic product, which measures the health of the economy, contracted by 0.1% after previous estimates suggested growth has been flat.

Meanwhile, there was zero growth between April and June, after it was first calculated to have risen by 0.2%.

A recession is defined as when the economy shrinks for two three-month periods in a row.

There have been concerns over the UK’s weak economic growth for some time, but the country has managed to avoid a recession so far.

Ashley Webb, UK economist at Capital Economics, said that the revised figures “may mean that the mildest of mild recessions started” in the third quarter between July and September.

“But whether or not there is a small recession, the big picture is that we expect real GDP growth to remain subdued throughout 2024,” he said.

The new figures suggested that rising interest rates are weighing on consumer spending, which slowed over the period.

The Office for National Statistics (ONS) also said it revised down its figures for the three months after additional information showed that businesses in film production, engineering and design as well as telecommunications were “all performing a little worse than we thought”.

It added there were “weaker performances” from smaller businesses, particularly those in the hospitality and IT sectors.