The UK economy has shown no growth in the last three months, according to the latest figures from the Office for National Statistics (ONS). This comes after concerns of a recession were raised last month. The ONS reported that GDP was flat (0.0% growth) in the three months leading up to October, with a 0.3% decline in October alone.
Contractions Across Main Sectors
Expert Darren Morgan stated that initial estimates suggest flat GDP growth over the past three months. While there were increases in services, such as engineering, film production, and education, which recovered from summer strikes, these gains were offset by declines in manufacturing and housebuilding. October saw contractions across all three main sectors, with services being the biggest driver of the fall due to drops in IT, legal firms, and film production.
What Does This Mean for the Economy?
A healthy economy is one that is growing and not in recession. A recession is typically defined as two consecutive quarters of GDP decline. The UK managed to avoid a recession as the economy remained unchanged in the three months leading up to March. Recessions are concerning because they often lead to job losses, stagnant wages, and business closures. Additionally, the government may experience reduced tax revenue, potentially resulting in cuts to public services and benefits. The UK previously entered a recession in 2020 due to the impact of the coronavirus pandemic.
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