UK on the brink of recession after economy contracted 0.2% in Q3

The Bank of England has warned that the UK is facing its longest recession since records began a century ago.

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London — UK economy contracted by 0.2% It indicates that the third quarter of 2022 could be the beginning of a prolonged recession.

Preliminary estimates show the economy outperformed expectations in the third quarter despite the recession. Economists had forecast a contraction of 0.5%, according to Refinitiv.

After the contraction of 0.1% in the second quarter was corrected to an increase of 0.2%, the contraction still does not represent a technological recession marked by two consecutive quarters of negative growth.

“In terms of output, there was a slowdown in the quarter for services, manufacturing and construction. The services sector saw flat output in the quarter, driven by a decline in consumer services. Q3 2022 All 13 manufacturing subsectors will fall in 2020,” the National Bureau of Statistics said in a report on Friday.

of bank of england Last week’s forecast Longest recession in country since records beganThis suggests that the recession that started in the third quarter is likely to continue through 2024, with the unemployment rate reaching 6.5% over the next two years.

The country is facing a historic cost of living crisis, compounded by pressure on real incomes due to high prices for energy and traded commodities. Central banks have recently Biggest rate hike since 1989 This is because policy makers are trying to keep double-digit inflation under control.

Quarterly GDP levels in Q3 were 0.4% below pre-corona levels in Q4 2019, according to ONS. On the other hand, his September figures were hit by the holiday, when the UK’s GDP fell by 0.6%. For the state funeral of Queen Elizabeth II.

UK Finance Minister Jeremy Hunt is set to unveil a new fiscal policy agenda next week that is expected to include significant tax increases and spending cuts. Prime Minister Rishi Sunak has warned that “difficult decisions” will be needed to stabilize the country’s economy.

“While some headline inflation may start to improve over time, we expect prices to remain elevated for some time, putting more pressure on demand,” said George Lagarius, chief economist at Mothers.

“If next week’s budget proves to be really ‘difficult’ for taxpayers, as expected, consumption will probably be further subdued and the Bank of England will begin to ponder the impact of demand shocks on the economy.”

This is breaking news and will be updated soon UK on the brink of recession after economy contracted 0.2% in Q3

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