UK economy is shrinking… and fears of a ‘prolonged recession’
The UK economy contracted in the three months to September, at the start of what is likely to be a prolonged recession, adding to the challenges for Chancellor Jeremy Hunt as he braces for tax hikes and spending cuts.
Yesterday, official data showed that the UK economy contracted 0.2% in the third quarter of this year, less than analysts’ expectations of a 0.5% contraction in a survey conducted by Reuters.
This is the first drop in GDP since early 2021, when the UK imposed tough lockdown measures to fight ‘Corona’, and it also comes at a time when families and businesses are facing an acute cost of living crisis.
The size of the UK economy is much smaller than it was before the pandemic, and it is the only G7 economy that has not fully recovered from the recession it caused.
The Resolution Foundation said that while the fall was less than investors feared, it put Britain on the path to the fastest return to recession since the mid-1970s.
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