UK economy contracts by more than initially estimated in third quarter

The UK economy contracted by more than first thought in the third quarter, with gross domestic product (GDP) dropping by a higher revised amount. 

GDP fell by a revised 0.3 per cent, compared to an initial estimation of a 0.2 per cent decline, fresh figures from the Office for National Statistics revealed on Thursday.

The services sector grew its output by 0.1 per cent while the production sector dropped by 2.5 per cent, during the July to September period.

Statisticians now believe the level of real GDP in the third quarter is 0.8 per cent below its pre-coronavirus level in the fourth quarter of 2019, lower than a previous estimate of 0.4 per cent below.

It is also now thought that the economy grew less than initially estimated throughout the first half of the year.

Revisions from the ONS have revealed the UK’s growth to be 0.6 per cent in the first quarter, compared to an initial estimation of 0.7 per cent. 

Growth was put down as 0.1 per cent in the second quarter, versus an earlier estimation of 0.2 per cent.

Darren Morgan, director of economic statistics at the ONS, said: “Our revised figures show the economy performed slightly less well over the last year than we previously estimated, with manufacturing and electricity generation notably weaker.

“Household incomes continued to fall in real terms, albeit at a slower rate than in the previous two quarters, while – taking account of inflation – household spending fell for the first time since the final Covid-19 lockdown in the spring of 2021.”