The UK economy shrank in August, falling by 0.3%, according to new figures from the Office for National Statistics this morning
Production fell by 1.8% in August 2022 after a fall of 1.1% in July 2022 and was the main contributor to the fall in GDP; this fall was mainly because of a decrease of 1.6% in manufacturing.
Services fell by 0.1% in August 2022, human health and social work activities, and arts, entertainment and recreation activities fell by 1.3% and 5.0% respectively and were the largest contributors to the small fall in services in August, partially offset by growth of 1.2% in professional, scientific and technical activities.
Construction grew by 0.4% in August 2022, the increase in monthly construction output in August came solely from a 1.9% increase in new work, as repair and maintenance saw a decrease of 2.0% on the month whilst output in consumer-facing services fell by 1.8%
ONS Chief Economist Grant Fitzner said:
“The economy shrank in August, with both production and services falling back, and with a small downward revision to July’s growth, the economy contracted in the last three months as a whole.”
Ben Jones, CBI Lead Economist, said:
“The UK economy retreated in August. And business surveys, including our own, have turned sharply downwards since the summer and there is an increasing chance that the UK entered a downturn during the third quarter.
“Ongoing supply challenges, sharp rises in energy prices, and a tight labour market mean businesses continue to face significant cost pressures, but the Government’s energy price caps provide welcome breathing space.
“Rising interest rates are adding further to costs facing businesses and households. In the run-up to the medium-term fiscal plan, business will be looking for reassurance that policy measures will be delivered against the backdrop of a stable macroeconomic environment.”
