Summary:
The UK economy contracted by 0.3% in August, official figures show. The drop from 0.1% in July increased the likelihood of a recession. The oil and gas industry’s slowdown and a severe manufacturer’s reduction were to blame for the monthly figure’s decline.
According to official figures, the UK economy unexpectedly contracted in August for the first time in two months.
According to the Office for National Statistics, the economy expanded by 0.1% in July, so the unexpected 0.3% decline increased the likelihood of a recession.
Analysts had anticipated that economic growth would stagnate as businesses and individuals dealt with rising prices.
The UK will enter a recession toward the end of the year, the Bank of England has warned.
Two consecutive quarters, or three-month periods, of declining economic production are considered a recession. The UK economy also contracted by 0.3% in the three months ending in August compared to the three months ending in May 2022.
According to the Office for National Statistics, the oil and gas industry’s slowdown and a severe manufacturer’s reduction were to blame for the monthly figure’s decline.
According to ONS Chief Economist Grant Fitzner, “the economy fell in August with both production and services sliding back, and with a minor negative revision to July’s growth, the economy contracted in the last three months as a whole.”
Numerous customer-facing industries, including retail, hair salons, and hotels, were “faring relatively poorly,” Mr. Fitzner continued.
Analysis by: Advocacy Unified Network
