UK Economy Contracted More Than Initially Estimated in 3Q

By Xavier Fontdegloria

The U.K. economy contracted at a steeper pace than previously thought in the third quarter, and the short-term outlook remains bleak as the country is widely expected to slid toward a recession.

Gross domestic product fell 0.3% from July to September compared with the previous three-month period compared with the 0.2% contraction previously estimated, according to data from the Office for National Statistics released Thursday.

This marks a downturn from the marginal 0.1% on-quarter expansion registered from April to June, which was also downwardly revised. Revisions across 2022 mean that real gross domestic product is currently estimated to be 0.8% below its prepandemic level, the ONS said.

The U.K. economy is expected to contract further at the end of the year and into 2023, according to a consensus forecast from FactSet. Economists expect gross domestic product to shrink by 0.3% in the fourth quarter of 2022, and by another 0.3% for both the first and second quarters of 2023.

In a separate release, the ONS said the U.K.’s current-account deficit narrowed to 19.4 billion pounds ($23.44 billion) in the third quarter from a revised GBP35.1 billion deficit in the second quarter.

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