Despite the contrary to previous forecasts, the UK is not currently in recession, but the economy continues to slow, according to newly released official data.
The Office for National Statistics (ONS) announced on September 30 that UK GDP increased by 0.2% in the three months to June.
Statistical agencies had previously predicted a 0.1% decline in GDP for the quarter.
ONS Chief Economist Grant Fitzner said:
“They also show that while household savings fell in recent quarters, households saved more than previously estimated during and after the pandemic.”
Earlier this month, the Bank of England said it was likely that the UK was now in recession as it projected a further 0.2% decline over the three months to September.
A technological recession is when the economy falls for two consecutive quarters.
However, the new ONS figures mean that even if the economy were to fall as expected this quarter, we are not yet in recession.
However, the ONS said the UK economy slowed in the second quarter compared to the first quarter.
Some service industries are seeing a slowdown, reflecting pressures on household incomes and the impact of labor and product shortages.
Consumer confidence has plunged to historically low levels and household real disposable income has fallen for the fourth straight quarter, reflecting the impact of rising prices, the ONS added.
More timely figures show continued decline in retail sales volume in August 2022.
The latest independent forecast for the UK economy sees a slowdown in the second half of the year, but the outlook for next year is modest.
The economy as a whole is smaller than previous forecasts, despite growth in the latest quarter, according to new figures.
Economists said they believed overall GDP is now 0.2% below pre-pandemic levels, while they previously thought it was 0.6% higher than before COVID-19 hit.
“Overall, these new numbers are slightly smaller than previous estimates, and the economy contracted more than we had originally projected in the early months of the pandemic, so it’s likely that we’ll see more growth in the second quarter when the pandemic hits. It showed that it was slightly below levels, but it rebounded more strongly in the second half of 2021,” said ONS economist Fitzner.
PA Media contributed to this report.