It comes after the Bank of England warns the UK is facing a two-year financial slump.
Image source, Getty ImagesThe UK appears to be heading into recession after the latest official figures showed the economy shrank between July and September.
The economy contracted by 0.2% between July and September as soaring prices hit businesses and households.
A country is in recession when its economy shrinks for two three-month periods in a row. The UK is expected to be in one by the end of the year.
The Bank of England said the recession will be the longest on record.
A recession has been widely forecast in the UK for some time due to the prices of goods such as food, fuel and energy soaring, which is down to several factors, including the war in Ukraine.
It has left many households facing hardship and started to drag on the economy.
Chancellor Jeremy Hunt said he was “under no illusion that there is a tough road ahead”.
He warned it would require “extremely difficult decisions to restore confidence and economic stability”.
Mr Hunt is set to unveil his tax and spending plans next week in the Autumn Statement.
The contraction in the economy in the three months to September was driven by a decline in manufacturing, which was seen “across most industries”, the Office for National Statistics (ONS), which published the figures, said.
Darren Morgan, director of economic statistics at the ONS, said customer-facing industries also “fared badly”, with shops hard hit.
He said the bank holiday for Queen Elizabeth II’s funeral played a part in the economy’s poor performance in September. The economy shrunk by 0.6% alone in September.
Prices for goods have been rising at the fast rate for 40 years, which has led to many households cutting down on spending due to the squeeze of higher prices.