The UK economy contracted more than expected in the third quarter of this year, moving among the leading developed countries of the Group of Seven ahead of what will be a dismal 2023, data showed on Thursday. .
Economic output fell 0.3% quarterly compared to the previous estimate of -0.2%, the Office for National Statistics (ONS) said.
The ONS said the data put Britain at the bottom of the G7 in terms of quarterly growth, although the reading was slightly lower on the one-off bank holiday for Queen Elizabeth’s funeral.
Business investment fell 2.5% quarterly, versus the first estimate of a 0.5% drop earlier.
“Looking ahead, the UK is likely to continue to underperform. We expect the UK to experience the deepest recession of any major developed economy in 2023, given the severity of monetary and fiscal policy constraints,” said economist Gabriella Dickens of Pantheon Macroeconomics.
The ONS said Britain’s economic output in the third quarter was 0.8% below its final 2019 level, compared with an earlier estimate of 0.4% below and in contrast to the rest of the G7 countries which have recovered.
While the dominant services sector expanded 0.1% in the quarter, manufacturing and construction declines dragged the headline figure lower.
All 13 manufacturing subsectors declined in the third quarter, the ONS said, while inflation-adjusted household income shrank for the fourth quarter.
Most economists polled by Reuters expect the economy to contract again in the current quarter, which in the eyes of some analysts defines a recession.
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