LONDON – The UK economy shrank 0.2%🇧🇷 The third quarter of 2022 marks the beginning of what could be a long recession.
Initial estimates indicated that the economy performed better than expected in the third quarter, despite the slowdown. Economists had expected a contraction of 0.5%, according to Refinitiv.
After adjusting for 0.1% contraction in the second quarter to a 0.2% increase, the contraction still does not represent a technical slowdown — two consecutive quarters marked by negative growth.
In terms of production, there was a slowdown in the quarter in the services, manufacturing and construction sectors. The services sector slowed to flat production in the quarter, led by a decline in consumer-oriented services, while the manufacturing sector declined 1.5%. The Office for National Statistics said in its report on Friday that the third quarter of 2022 included a decline in all 13 sub-sectors of the manufacturing sector.
a Bank of England Last week’s forecast Longest recession in the country since records beganThe decline, which began in the third quarter, will continue through 2024 and indicate that unemployment will remain at 6.5% over the next two years.
The country is facing a historic cost-of-living crisis, fueled by a squeeze in real income due to rising prices for energy and tradable goods. Recently imposed by the central bank Biggest interest rate hike since 1989 Policymakers are trying to rein in double-digit inflation.
The Office for National Statistics said that the level of quarterly GDP in the third quarter was 0.4% lower than the pre-Covid level in the last quarter of 2019. Meanwhile, September figures showed that Britain’s GDP fell by 0.0000.6%, due to Holiday. . For the state funeral of Queen Elizabeth II.
British Finance Minister Jeremy Hunt will announce a new fiscal policy agenda next week, which is expected to include big tax increases and spending cuts. Prime Minister Rishi Sunak has warned of the need to take tough decisions to stabilize the country’s economy.
“While some intervention inflation numbers are starting to look better from here, we expect prices to remain elevated for a while, adding further pressure on demand,” said Jorge Lagarias, chief economist at Mazars.
“If next week’s budget turns out to be really ‘harsh’ on taxpayers, as expected, consumption will be further stifled and the BoE will have to start thinking about the impact of the demand shock on the economy.”
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