The announcement on Monday is a retraction, as statisticians had beforehand estimated the economic system would present 0.1 per cent development for the quarter.
The Workplace for Nationwide Statistics (ONS) additionally revised down its development studying for the second quarter of 2024, to 0.4 per cent.
In September, the division stated GDP had elevated by 0.5 per cent, which was a discount on earlier estimates.
It’s a blow to chancellor Rachel Reeves and her hopes to show across the economic system after what she described as “15 years of neglect” underneath consecutive Conservative governments.
Ms Reeves stated in response: “The price range and our plan for change will ship sustainable long-term development, placing more cash in individuals’s pockets by means of elevated funding and relentless reform.”
A recession is outlined as two successive quarters of decline in GDP
Richard A Brooks / AFP by way of Getty Pictures
A recession is outlined as two successive quarters of decline in GDP – the frequent measurement of the scale of a rustic’s economic system.
Within the UK, it’s measured in sterling and is a calculation of the worth of products and companies produced over a time frame.
However the measurement most individuals give attention to is the proportion change – the expansion of the nation’s economic system over a time frame, sometimes 1 / 4 or a 12 months. It has been used for the reason that Nineteen Forties.
How lengthy does a recession often final?
The size of a recession can range relying on a number of components and the overall financial local weather.
The UK entered a recession in 2020 due to Covid lockdowns, and it lasted for six months. This was brought on by rising power costs and the collapse of the housing market.
In 2008, the worldwide monetary crash led to 5 successive quarters of recession and was the longest one for the reason that Second World Warfare.
If a recession carries on for a very long time, or is especially unhealthy, it is called a melancholy.
When was the final recession?
The latest recession was on the finish of 2023, when the UK economic system retracted by 0.3 per cent in three months.
Nonetheless, this isn’t as extreme as different recession durations prior to now. Earlier than this, the economic system plunged by 20 per cent between April and June 2020, as companies closed and folks have been ordered to remain at residence. GDP had fallen by 2.2 per cent between January and March that 12 months.
On the time, the ONS stated: “That is the most important quarterly contraction within the UK economic system since ONS quarterly information started in 1955, and displays the continuing public well being restrictions and types of voluntary social distancing which were put in place in response to the coronavirus pandemic.”
