According to official statistics released on Friday, the British economy shrank in the three months that ended in September, and analysts expect further contraction to last for many months.
The Office for National Statistics reported that between July and September, the gross domestic product decreased by 0.2%, which was less than anticipated but is still thought to be the beginning of a protracted recession.
GDP shrank by 0.6% in September, and by 0.1% in August, the statistics office said.
It said a decline in manufacturing output and an extra holiday to mark the death of Queen Elizabeth II, which contributed to “a notable fall in retail,” were behind the decline.
According to the report, the U.K. economy is currently 0.2% smaller than it was in February 2020, just before the COVID-19 pandemic caused significant economic disruption for months.
The Bank of England hiked its main interest rate last week by three quarters of a percentage point, to 3% — its biggest increase in three decades, reports AP.
The central bank said the move was needed to beat back stubbornly high inflation that is eroding living standards and is likely to trigger a “prolonged” recession.
