UK economy flatlines as GDP has zero per cent growth from August to October – and fell by 0.3% last month
THE UK economy has flatlined in the last three months, latest figures from the Office for National Statistics (ONS) show.
Gross domestic product (GDP) has fallen 0.3%, down from 0.2% growth in September, the Office for National Statistics (ONS) said.
It came as all three of the main sectors that the ONS tracks fell into negative territory for the first time since July.
Economists had expected GDP to contract by just 0.1%.
The figures may reignite concerns that the UK economy is heading for recession.
If GDP drops for two consecutive quarters it is defined as a recession, which leads to job losses and wages stalling.
The UK last went into recession in 2020 after the coronavirus pandemic hit, shutting down large parts of the economy.
ONS director of economic statistics Darren Morgan said: “Our initial estimates suggest that GDP growth was flat across the last three months.
“Increases in services led by engineering, film production and education – which recovered from the impact of summer strikes – were offset by falls in both manufacturing and housebuilding.
“October, however, saw contractions across all three main sectors.
“Services were the biggest driver of the fall with drops in IT, legal firms and film production – which fell back after a couple of strong months.
“These were also compounded by widespread falls in manufacturing and construction, which fell partly due to the poor weather.”
It comes after the UK economy showed no growth between July and August.
GDP measures the value of goods and services produced in the UK.
It also estimates the size and growth of the economy.
What does it mean for my money?
A healthy economy is one that is growing and not in recession.
A country is in recession if there are two consecutive quarters of Gross Domestic Product (GDP) falling.
The year is split into four three-month quarters.
The economy remained unchanged in the three months to March, which means a recession was avoided.
Recessions are bad news because it usually means jobs will be lost and wages will stall.
It can cause businesses to go into administration or go bust too.
This, in turn, means the government gets less tax, which could mean cuts to public services and benefits such as Universal Credit. Tax rates might go up too.
The UK last went into recession in 2020 after the coronavirus pandemic hit, shutting down large parts of the economy.
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