UK economy contracts in second quarter as recession looms
The UK economy contracted in the three months to June, declining 0.1 percent on the quarter as raging inflation took its toll on activity, data from the Office for National Statistics showed Friday.
The drop followed a 0.8 percent contraction in the first three months of the year and was less pronounced than the 0.3 percent contraction analysts had projected ahead of the release.
Monthly estimates show that GDP fell by 0.6 percent in June 2022, following a downwardly revised 0.4 percent increase in May.
The largest negative contributions to services output resulted from human health and social work activities, and wholesale and retail trade, the statistics office said. Those partially offset positive contributions from accommodation and food service activities, and other service activities.
The data comes after the Bank of England warned that recession is imminent and could last for five quarters.
‘’Risk of recession is rising quickly, with gas futures hitting new highs for next winter and our latest estimates suggesting the household energy price cap could come close to £5,000 in the second quarter of next year,” ING economist James Smith comments on the GDP data. “Much now depends on fiscal policy announcements in the autumn.”