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UK on brink of recession after economy shrinks in third quarter of 2023
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UK on brink of recession after economy shrinks in third quarter of 2023
UK GDP fell by 0.1% in July-September, worse than first estimated, raising fears of a recession
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UK property sales and demand well up on a year ago, survey finds
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Fuel forecourt prices in 2023 second highest on record, says AA
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Today's agenda
The UK economy is on the brink of recession after new data showed GDP shrank slightly in the third quarter of the year.

The Office for National Statistics (ONS) has revised down its estimate for the economy in July-September. It now estimates that UK GDP fell by 0.1% in the third quarter of 2023, down from the previous estimate of no growth.

The downgrade is because the UK services sector is now estimated to have fallen by 0.2% in the third quarter of 2023, revised down from a first estimate fall of 0.1%.

The ONS said: "In output terms, there was a 0.2% fall in the services sector in the latest quarter, which offset a 0.4% increase in construction output and a 0.1% increase in the production sector."

In another blow, GDP is now estimated to have shown no growth in Q2, revised down from the previous estimate of +0.2% growth.

A technical recession is two quarters of contraction in a row, so if GDP falls in October-December, the UK will be in recession.

We already know that the economy shrank in October, by 0.3%.

The chancellor, Jeremy Hunt, said that the medium-term outlook for the UK economy was “far more optimistic” than today’s GDP data showed.

He added: “We’ve seen inflation fall again this week, and the OBR (Office for Budget Responsibility) expects the measures in the autumn statement, including the largest business tax cut in modern British history and tax cuts for 29 million working people, will deliver the largest boost to potential growth on record.”

The ONS has also reported that retail sales volumes in Great Britain rose by 1.3% in November.

That follows no growth in October (revised from a fall of 0.3%).

Darren Morgan, a director of economic statistics at the ONS, said: "Retail sales grew strongly in November as heavy Black Friday discounting encouraged shoppers to spend. However, with the three-month trend continuing to fall and overall sales still below pre-pandemic levels, it’s still a challenging time for retailers.

“In the latest month, household goods retailers, clothing shops and department stores all reported robust sales, with computer stores, sports equipment, toy shops and cosmetics stores particularly benefiting from the impact of their Black Friday promotions.

“Supermarket sales ticked up a little, but it was specialist food and drink stores that had a really strong November due to customers stocking up early for Christmas and spending more than we have traditionally seen at this time of year.”

The agenda
• 1.30pm GMT: Canadian GDP for October
• 1.30pm GMT: US PCE index of producer price inflation for November

We’ll be tracking all the main events throughout the day ...
Opinion
Royal Mail has been heading for collapse for years. Now it can’t even deliver my Christmas present
Royal Mail has been heading for collapse for years. Now it can’t even deliver my Christmas present
The miserly tale of how a university took its staff’s wages – and the public paid the price
 

Marina Hyde

Guardian columnist

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Hello to you, dear reader!

When the former Albanian dictator Enver Hoxha delivered his New Year message back in 1967, he pulled the cord marked “truth bomb”. “This year will be harder than last year,” he declared. “It will, however, be easier than next year.” I mean … on the one hand: thanks for not sugar-coating it, Enver. On the other: way to kill the party buzz, you monster!

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