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According to the Office for National Statistics (ONS), the UK's Gross Domestic Product (GDP) fell by a revised 0.1 percent against the zero growth initially estimated. Photo AFP.

UK’s economy shrinks, brink of recession

ByYusuf Shukri

LONDON, Dec 22: The UK economy has underperformed compared to the previous estimates, notably in the July-September period over the last two quarters.

According to the Office for National Statistics (ONS), the UK’s Gross Domestic Product (GDP) fell by a revised 0.1 percent against the zero growth initially estimated.

Flatlined during the second quarter of the year, after prior estimates showed 0.2 percent growth, raising the risk of the country dipping into a recession.

Industries including film production, engineering and design and telecommunications showed a weaker performance during the third quarter than the ONS initially thought.

ONS’ Director of Economic Statistics, Darren Morgan stated that data collected from their monthly survey and Value-Added Tax (VAT) returns show the economy has performed slightly less in the last two quarters than ONS’ initial estimation.

“The broader picture, though, remains one of an economy that has been little changed over the last year,” he said.

Despite this UK’s Chancellor, Jeremy Hunt said the economic outlook should not be dampened.

“The medium-term outlook for the UK economy is far more optimistic than these numbers suggest.

“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,” he added.

More predictions by economic analysts said that if UK’s GDP falls between October and December, it will face an inevitable recession, which can be defined as two consecutive quarters of negative growth. – TVS

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