Economy of UK
UK GDP, according to preliminary estimates, declined by 0.2% between July and September 2022. This is stated in a report from the Office for National Statistics (ONS) of the United Kingdom.
The drop in GDP in the country was not as noticeable as predicted by experts, who expected that in the III quarter the figure could fall immediately by 0.5%. In the meantime, the United Kingdom is still preparing to enter a recession which will be recorded after two consecutive quarters of GDP decline.
It is worth pointing out that previously published by the ONS preliminary data for the second quarter showed a fall in GDP of 0.1% but then it was corrected so that the economy grew by 0.2%.
The Bank of England expects the recession in the UK to last at least two years. The country's government is due to unveil a plan next Thursday aimed at a speedy recovery from the crisis, with both tax increases and spending cuts in the budget.
"The Bank of England is forecasting a recession and this is disappointing but expected," the country's finance ministry chief Jeremy Hunt told Sky News television on Friday. "We now need to present a plan to tackle the cause of the problems we are seeing inflation as well as protecting the most vulnerable people."
The minister stressed that the International Monetary Fund estimates that "a third of the world economy is or will be in recession this year or next year". As Hunt noted, "for the most part, but not entirely" this is due to a sharp rise in global energy prices, as well as the impact of the COVID-19 pandemic.
"I am under no illusions: there is a tough road ahead that will require extremely difficult decisions to restore economic stability and business and investor confidence. However, in order to achieve long-term sustainable growth, we need to get inflation under control, balance the budget and reduce the size of the debt. There is no other road," Hunt added.
Also, director of economic statistics at the ONS, said: "As September showed a marked fall partly due to the impact of the extra bank holiday for the Queen's funeral, overall the economy contracted slightly in the third quarter."
Nicholas Hyett, equities analyst at Wealth Club, said: "Had it not been for the disruption caused by the Queen's funeral, during which many businesses closed, it is possible that the UK economy could have performed positively in Q3."