UK third-quarter GDP revised down to show 0.1% contraction

(Sharecast News) - The UK economy shrank in the third quarter, according to figures released on Friday by the Office for National Statistics. The economy contracted by 0.1% in the period from July to September, down from a previous estimate of no growth.

The services sector contracted 0.2%, revised down from a first estimate of a 0.1% decline.

The data also showed that there was no economic growth in the second quarter, down from a previous estimate of 0.2% growth.

Darren Morgan, director of economic statistics at the ONS, said: "The latest data from both our regular monthly business survey and VAT returns show the economy performed slightly less well in the last two quarters than our initial estimates. The broader picture, though, remains one of an economy that has been little changed over the last year.

"The latest VAT data, which takes a little time to receive and process means we now estimate the economy showed no growth in the second quarter, with weaker performances from smaller businesses, particularly those in both hospitality and IT than first shown.

"We also now estimate the economy contracted slightly in the third quarter, when we previously reported no growth, with later returns from our business survey showing film production, engineering & design and telecommunications all performing a little worse than we initially thought."

Ashley Webb, UK economist at Capital Economics, said: "The 0.1% q/q fall in real GDP in Q3 may mean that the mildest of mild recessions started in Q3. But whether or not there is a small recession, the big picture is that we expect real GDP growth to remain subdued throughout 2024."