The UK is at risk of recession after revised figures showed the economy shrank between July and September, according to data from the Office for National Statistics (ONS).
Gross domestic product, which measures the health of the economy, contracted by 0.1% after previous estimates suggested growth has been flat.
Meanwhile, there was zero growth between April and June, after it was first calculated to have risen by 0.2%.
A recession is typically defined as when the economy shrinks for two three-month periods – or quarters – in a row.
Meanwhile, the UK’s inflation rate fell to 3.9% in the year to November, the ONS confirmed.
The fall was bigger than the ONS had anticipated with lower petrol prices contributing to the reduction in the inflation rate.
Price increases for bread and cakes are also easing, according to the ONS.
David Bharier, Head of Research at the British Chambers of Commerce (BCC), said:
‘Today’s data showing the CPI rate grew at 3.9% in November, a greater slowdown than expected, is welcome confirmation that the headline rate of inflation is continuing to ease. However, prices are still rising from a very high base following multiple economic shocks and core CPI remains stubborn at 5.1%.
‘Persistent inflation and high interest rates are likely to remain a barrier to business growth for some time to come. Businesses are desperate for a clear, long-term plan for growth which sets out a vision for infrastructure, skills and green innovation.’
The fall in inflation followed the Bank of England’s decision to hold interest rates at 5.25%, marking the third time in a row that the Bank has left the rate unchanged.
‘While a cut in the interest rate could have provided some relief for firms ahead of Christmas, [the] decision to hold at 5.25% was expected and allays fears of further rises.
‘UK businesses have been faced with the twin shock of an inflation crisis and increased borrowing costs.
‘The BCC’s latest Economic Forecast expects only a 0.25% point cut in the interest rate for the whole of 2024, although businesses need to be prepared for any unexpected changes given the uncertain policy landscape.’
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