UK economy shrinks ahead of general election

"Britain's economy unexpectedly shrank in the third quarter, after contracting in the previous three months, official data show, heightening fears of a recession ahead of next year's general election, AFP reports."
The unfavourable news dealt a blow to Conservative Prime Minister Rishi Sunak, who trails opposition Labor leader Keir Starmer in the polls despite a sharp slowdown in inflation.
"GDP contracted by 0.1% between July and September due to a fall in services output, which was less than the preliminary estimate of zero," the Office for National Statistics (ONS) said in a statement.
Activity has been hit by the Bank of England's aggressive interest rate hikes, which are aimed at curbing elevated inflation and easing the cost of living crisis.
The ONS added that the economy remained flat in the second quarter, lowering its previous estimate.
This has given rise to speculation of a potential recession, defined as two consecutive quarters of negative economic growth.
"The decline in real GDP in the third quarter may mean that the mildest of all mild recessions has begun," noted Capital Economics analyst Ashley Webb.
"But regardless of whether there is a minor recession, the overall picture is that we expect real GDP growth to remain weak throughout 2024."/BГNES