The UK economy shrank by 0.2 per cent in the third quarter of 2022, setting Britain on course for the quickest return to recession since 1975 and offering sobering backdrop to the Autumn Statement next week, the Resolution Foundation said today (Friday).
While a smaller fall than markets expected, the latest contraction was widespread, with consumer spending shrinking amidst an acute cost-of-living.
Should the UK slide into recession next quarter it would be the quickest return to recession since 1975, with the UK only coming out of its last recession eight quarters ago (in Q2 2020).
The UK’s performance was weaker than all other G7 economies (though data for Japan has not yet been published).
James Smith, research director at the Resolution Foundation, said: “Falling consumer spending has caused the economy to shrink in the third quarter of 2022. This has set Britain on course for the quickest return to recession in nearly half a century.
“These latest figures provide a sobering backdrop to the Autumn Statement next week. The Chancellor will need to strike a balance between putting the public finances on a sustainable footing, without making the cost-of-living crisis even worse, or hitting already stretched public services.”
