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Official data showed that economic output contracted by 0.2% in the third quarter, versus analysts’ expectations of a contraction of 0.5% in a Reuters poll on Friday.
Britain’s economy contracted in the three months to September, at the start of what is likely to be a long slump Recessionhighlighting the challenge facing the Minister of Finance, Jeremy HuntAs he prepares to raise taxes and cut spending next week.
Official data on Friday showed that economic output contracted by 0.2% in the third quarter, against analysts’ expectations of a contraction of 0.5% in a Reuters poll.
But it was the first drop in gross domestic product since the start of 2021, when the UK was still under tough coronavirus restrictions, as households and businesses grappled with the cost of living crisis.
Britain’s economy is now below its pre-pandemic size – it is the only G7 economy not yet fully recovered from the Covid-induced recession – and is smaller than it was three years ago on a quarterly basis.
In response to the data, Hunt reiterated his warnings that tough decisions on tax and spending must be made.
“I have no illusions that there is a difficult road ahead, a road that will require very difficult decisions to restore confidence and economic stability,” Hunt said in a statement.
“But to achieve long-term sustainable growth, we need to control inflation…and reduce debt,” he added. “There is no other way”
