UK economy contracts as households cut spending

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The UK economy contracted within the second quarter, with households slicing spending as the price of residing disaster started to chunk and well being sector output declining as Covid circumstances fell.

Gross home product, the measure of the amount of products and providers produced, fell 0.1 per cent within the second quarter of the 12 months after rising 0.7 per cent within the earlier quarter.

The decline accelerated on the finish of the quarter with GDP falling 0.6 per cent in June, reflecting two misplaced work days from the Queen’s platinum jubilee, however the Office for National Statistics stated the celebrations had “little impact on the quarterly estimates”.

The figures present that the UK economy was 0.6 per cent bigger than it was within the quarter instantly earlier than the pandemic, however considerably smaller than anticipated on the time, suggesting lasting injury to financial efficiency.

The figures on Friday have been near these anticipated by economists and the Bank of England. An increase in third-quarter GDP is forecast earlier than enormous will increase in vitality payments ship the UK economy into recession within the winter.

Nadhim Zahawi, the chancellor, stated: “I know that times are tough and people will be concerned about rising prices and slowing growth, and that’s why I’m determined to work with the Bank of England to get inflation under control and grow the economy,” he stated.



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