Britain’s economy unexpectedly shrank in the third quarter, official data showed Friday, raising fears of a potential recession before an election due next year.
Gross domestic product contracted 0.1 per cent between July and September, down from a prior estimate of zero growth, the Office for National Statistics said in a statement.
Activity was adversely impacted by interest-rate hikes, elevated inflation and a sliding services sector.
The ONS added that the economy flatlined in the second quarter, slashing its previous estimate of 0.2 per cent expansion.
That sparked speculation over a potential recession, defined as two straight quarters of negative economic growth.
“The fall in real GDP in the third quarter may mean that the mildest of mild recessions started,” noted Capital Economics analyst, Ashley Webb.
“But whether or not there is a small recession, the big picture is that we expect real GDP growth to remain subdued throughout 2024.”
Friday’s downbeat news delivers a blow to Conservative Prime Minister, Rishi Sunak, who trails opposition Labour leader Keir Starmer in the polls as Britons buckle under a cost-of-living crisis.
