Saudi Press

Saudi Arabia and the world
Monday, Jun 02, 2025

UK economy shrank more than previously thought

UK economy shrank more than previously thought

The UK economy shrank by more than first thought in the three months to September, revised figures show.

The economy contracted by 0.3%, compared with a previous estimate of 0.2%, as business investment performed worse than first thought, the Office for National Statistics (ONS) said.

Growth figures for the first half of 2022 have also been revised down.

The UK is forecast to fall into recession in the final three months of the year as soaring prices hit growth.

A country is considered to be in recession when its economy shrinks for two three-month periods - or quarters - in a row. Typically companies make less money, pay falls and unemployment rises, leaving the government with less money in tax to use on public services.

Darren Morgan, director of economic statistics at the ONS, said: "Our revised figures show the economy performed slightly less well over the last year than we previously estimated", with manufacturing "notably weaker".

He added that household incomes, when accounting for rising prices, continued to fall, and household spending "fell for the first time since the final Covid-19 lockdown in the spring of 2021".

The ONS said that gross domestic product (GDP) - the measure of the size of the economy - was now estimated to be 0.8% below where it was before the pandemic struck, downwardly revised from the previous estimate of 0.4% below.


The economy has been hit as surging energy and food prices push inflation - the rate at which prices rise - to its highest level in 40 years.

It means that consumers are spending less and businesses are cutting investment.

Along with its revision for the July-to-September period, the ONS said the economy also grew less than first estimated in the first half of the year - expanding by 0.6% in the first quarter and 0.1% in the second quarter.

The ONS has previously said growth stood at 0.7% and 0.2% in those quarters respectively.

It is not unusual for the ONS to revise its growth estimates. It produces a first estimate of GDP about 40 days after the quarter in question, at which point only about 60% of the data is available, so the figure is revised later as more information comes in.

Last week, figures from the ONS indicated that the economy shrank by 0.3% over the August-to-October period.

The government's independent forecaster, the Office for Budget Responsibility (OBR), has warned that the UK will fall into a recession "lasting just over a year".

The OBR has predicted that the economy will shrink by 1.4% in 2023 before growth gradually picks up again.


As a result it expects the unemployment rate to rise and house prices to fall sharply as the Bank of England puts up interest rates to control soaring prices.

Last week, the Bank raised its key rate to 3.5%, the highest level for 14 years, which is pushing up repayment costs for people with mortgages and loans.

The UK is not the only country seeing its economy slow down, with the US and eurozone also expected to fall into recession next year.

However, Gabriella Dickens from Pantheon Macroeconomics said she expected the UK to "suffer the deepest recession among major advanced economies in 2023".

Chancellor Jeremy Hunt blamed Vladimir Putin's invasion of Ukraine for the economic difficulties.

"High inflation driven by Putin's invasion of Ukraine is slowing economic growth across the world. No country is immune, least of all Britain," he said.

But responding to the latest ONS figures, Labour's shadow chancellor Rachel Reeves accused the government of losing control over the economy.

"GDP data has been revised down, leaving the UK with the worst growth in the G7 in the last quarter," she tweeted.

"The Tories have lost control of the economy and are leaving millions of working people paying the price."

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
European and Arab Ministers Convene in Madrid to Address Gaza Conflict
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
UAE Offers Free ChatGPT Plus Subscriptions to Citizens
Lebanon Initiates Plan to Disarm Palestinian Factions
Iran and U.S. Make Limited Progress in Nuclear Talks
The Daily Debate: The Fall of the Dollar — Strategic Reset or Economic Self-Destruction?
Trump Administration's Tariff Policies and Dollar Strategy Spark Global Economic Debate
OpenAI Acquires Jony Ive’s Startup for $6.5 Billion to Build a Revolutionary “Third Core Device”
Turkey Weighs Citizens in Public as Erdoğan Launches National Slimming Campaign
Saudi-Spanish Business Forum Commences in Riyadh
Saudi Arabia and Spain Sign MoU to Boost SME Sectors
UK Suspends Trade Talks with Israel Amid Gaza Offensive
Iran and U.S. Set for Fifth Round of Nuclear Talks Amid Rising Tensions
Russia Expands Military Presence Near Finland Amid Rising Tensions
Indian Scholar Arrested in Crackdown Over Pakistan Conflict Commentary
Israel Eases Gaza Blockade Amid Internal Dispute Over Military Strategy
President Biden’s announcement of advanced prostate cancer sparked public sympathy—but behind closed doors, Democrats are in panic
A Chinese company made solar tiles that look way nicer than regular panels!
Indian jet shootdown: the all-robot legion behind China’s PL-15E missiles
The Chinese Dragon: The True Winner in the India-Pakistan Clash
Australia's Venomous Creatures Contribute to Life-Saving Antivenom Programme
The Spanish Were Right: Long Working Hours Harm Brain Function
Did Former FBI Director Call for Violence Against Trump? Instagram Post Sparks Uproar
US and UAE Partner to Develop Massive AI Data Center Complex
Apple's $95 Million Siri Settlement: Eligible Users Have Until July 2 to File Claims
US and UAE Reach Preliminary Agreement on Nvidia AI Chip Imports
President Trump and Elon Musk Welcomed by Emir of Qatar Sheikh Tamim with Cybertruck Convoy
Strong Warning Issued: Do Not Use General Chatbots for Medical, Legal, or Educational Guidance
Saudi Arabia Emerges as Global Tech Magnet with U.S. Backing and Trump’s Visit
This was President's departure from Saudi Arabia. The Crown Prince personally escorted him back to the airport.
NVIDIA and Saudi Arabia Launch Strategic Partnership to Establish AI Centers
Trump Meets Syrian President Ahmad al-Shara in Historic Encounter
Trump takes a blow torch to the neocons and interventionists while speaking to the Saudis
US and Saudi Arabia Sign Landmark Agreements Across Multiple Sectors
Why Saudi Arabia Rolled Out a Purple Carpet for Donald Trump Instead of Red
Elon Musk Joins Trump Meeting in Saudi Arabia
Trump says it would be 'stupid' not to accept gift of Qatari plane
Quantum Computing Threatens Bitcoin Security
×