UK gross domestic product fell 0.2% in the third quarter of the year, compared to the quarter, according to data released Friday by the Office for National Statistics (ONS), the country’s statistical office.
In the second quarter of the year, a recession was starting to sound the alarm in the UK – something the Bank of England warned – but the ONS saw upward GDP growth between April and June, so, instead, from a 0.1% decline, it grew by 0.25 compared to the first three months of the year.
Thus, despite the 0.2% decline in the third quarter, the British economy continues to escape from a technical recession (it takes three consecutive quarters for this to happen).
It should be noted, in particular, that the past six months have been marked by a steady rise in inflation, which in the UK reached 8.8% in September, the highest value since December 1990.
In September alone, GDP fell 0.6% compared to August, “affected by the state funeral of Queen Elizabeth II, as some businesses closed or operated differently”.
If the GDP in the previous quarter managed to stay above the pre-pandemic level (the fourth quarter of 2019), the same would not have happened in the past three months. UK GDP was 0.4% lower than the pre-Covid period.
The Statistical Office notes that “there was a slowdown in the quarter for the services, production and construction sectors” and that “real household spending fell by 0.5% in the third quarter of 2022.”
In the face of high inflation, central banks have raised interest rates in an attempt to slow consumption in order to stabilize inflation. The Bank of England was no exception, earlier this month raising interest rates by 75 basis points (0.75%), the largest rise in more than 30 years.
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