The U.K. economy unexpectedly shrank by 0.3 percent in August, according to estimations released Wednesday by the Office for National Statistics, stoking fears of a recession.
In addition, the country’s gross domestic product (GDP) also shrank by 0.3 percent over the last three-month period, compared to the previous three months, the ONS statement said. The agency also revised its estimation for July, reporting growth of 0.1 percent (against 0.2 percent in its previous assessment).
The production sector, which fell by 1.8 percent, was the main driver of the slump, the ONS said.
Back in August, the Bank of England warned that the U.K. was heading toward recession “from the fourth quarter of this year.” A recession is usually defined as two consecutive quarters of negative growth.
U.K. Chancellor of the Exchequer Kwasi Kwarteng said in a statement: “Countries around the world are facing challenges right now, particularly as a result of high energy prices driven by Putin’s barbaric action in Ukraine.
“Our Growth Plan will address the challenges that we face with ambitious supply-side reforms and tax cuts, which will grow our economy, create more well-paid skilled jobs and in turn raise living standards for everyone,” he added.
“GDP figures show the U.K. economy is in a dire state because of this government. This is a Tory crisis, made in Downing Street, paid for by working people,” tweeted Labour’s shadow chancellor, Rachel Reeves. “They must reverse their disastrous mini-Budget.”
