LONDON (AP) – Updated figures from the Office for National Statistics on Thursday presented a grim picture of Britain’s economy, which contracted more than initially expected between July and September.
Gross domestic product fell a revised 0.3 percent in the third quarter of 2022, compared with an estimated 0.2 percent decline, as corporate investment performed worse than expected. Growth figures for the first half of 2022 were also revised downward, with figures showing the UK growing by just 0.6 percent in the first quarter and 0.1 percent in the second quarter.
The ONS also indicated that GDP is now estimated to be 0.8 percent below pre-pandemic levels, revised down from a previous estimate of 0.4 percent below.
“Our revised figures show that the economy has performed slightly worse over the past year than we had previously estimated, with manufacturing and electricity generation noticeably weaker,” said Darren Morgan, director of economic statistics at the ONS.
The coming months look far from bright, as experts predict the economy will contract further in the final quarter of 2022, which would see the U.K. fall into recession – when an economy contracts for two consecutive quarters – with predictions that it will experience contractions. of a similar size in the first and second quarters of 2023. The effects are already hitting consumers hard, with household spending falling 1.1% after inflation in the third quarter – the first decline since January to March 2021, when the UK was in lockdown.
“Household incomes continued to fall in real terms, albeit at a slower pace than in the previous two quarters,” Morgan said.
In comparison to other advanced economies, the U.K. is doing particularly badly.
“The national accounts confirm that the U.K. was the only G-7 economy in which third-quarter GDP was still below its pre-COVID level,” said Samuel Tombs of Pantheon Macroeconomics.
“Going forward, the U.K. will likely continue to underperform; we expect Britain to experience the deepest recession among the major advanced economies in 2023.”
