Glimmer of good news as UK economy ISN’T in recession (yet)

UK is NOT in recession (yet) – economy grew 0.2% in Q2, revised from 0.1% drop… but GDP STILL lower than pre-Covid after the size of the 2020 recession is UPDATED

  • ONS has revised the second quarter GDP performance from a fall of 0.1% to an increase of 0.2%
  • It means that the UK will technically not be in a recession if GDP falls this quarter.
  • Better performance largely due to the scale of the Covid recession being updated

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The UK economy may not officially be in a recession after revised figures showed it remained in the black in the second quarter.

Initial estimates suggested GDP fell 0.1 percent between April and June, but this has now been adjusted to 0.2 percent growth.

As a result, UK plc may not be in a technical recession, defined as two quarters in a row in decline, as the Bank of England said earlier this month.

However, the improved number from April to June was largely due to a grimmer assessment of previous performance, with the economy still smaller than it was before the Covid crisis.

The Office for National Statistics (ONS) now believes that the pandemic caused an 11 per cent drop in 2020, instead of the previously forecast 9.3 per cent.

That, once again, makes it the largest since the Great Freeze in 1709, as the post-World War I recession was 9.7 percent. Previous revisions had downgraded the size of the blow from its initial status as the largest in 300 years.

Instead of being 0.6 per cent larger than before Covid, the latest ONS estimate is that GDP is 0.2 per cent lower.

As a result, the body said the UK is the only G7 country that has not made up ground from Covid.

Initial estimates suggested GDP fell 0.2% between April and June, but this has now been adjusted to 0.1% growth.

Initial estimates suggested GDP fell 0.2% between April and June, but this has now been adjusted to 0.1% growth.

The Office for National Statistics (ONS) now believes that the pandemic caused an 11 per cent drop in 2020, instead of the 9.3 per cent previously forecast.

The Office for National Statistics (ONS) now believes that the pandemic caused an 11 per cent drop in 2020, instead of the 9.3 per cent previously forecast.

The Office for National Statistics (ONS) now believes that the pandemic caused an 11 per cent drop in 2020, instead of the 9.3 per cent previously forecast.

The Bank of England hinted that the UK was currently in a recession last week when it forecast another 0.2 percent drop for the three months to September.

However, the new ONS figures mean that even if the economy falls as forecast this quarter, it will not yet be in a recession.

The ONS said the upward revision was driven by improvements in the health and financial sectors.

ONS Chief Economist Grant Fitzner said: ‘These upgraded figures show the economy grew in the second quarter, revised up from a small dip.

“They also show that while household savings fell in the most recent quarter, households saved more than we had previously estimated during and after the pandemic.”

The ONS said the UK is the only G7 country that has not regained ground from Covid

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