The UK economy experienced a contraction in the third quarter of the year, according to revised figures released by the Office for National Statistics (ONS). The data shows that gross domestic product (GDP) declined by 0.1% compared to the previous quarter, which is lower than the initial estimate of flat growth published in November. Economists surveyed by The Wall Street Journal had also predicted flat growth for Q3.
Furthermore, the ONS revised down the GDP figures for the second quarter of the year, now stating that there was zero growth instead of the previously reported 0.2% increase. This revision means that the UK narrowly avoided a technical recession during the middle two quarters of 2023.
Darren Morgan, the ONS Director of Economic Statistics, explained that the slight contraction in Q3 was due to revised returns from their business survey. Sectors such as film production, engineering and design, and telecommunications performed worse than initially thought.
The services sector contributed to the decline in economic output with a 0.2% fall, offsetting the 0.4% increase in construction output and a 0.1% increase in the production sector.
Overall, the UK’s economic performance in the third quarter marks a setback, raising concerns about the country’s growth prospects and resilience.
Written by Ed Frankl