U.K. Economy Shrinks as Threat of Recession Nears

The British economy shrank over July, August and September, a troubling sign that the recession predicted by the nation’s central bankers may be beginning.

Gross domestic product, a measure of all the goods and services produced in Britain, fell by 0.2 percent in the third quarter of this year compared with the previous three-month period, according to preliminary estimates announced on Friday by the Office for National Statistics.

The slowdown was broad — including the production and services sectors — and meant that Britain’s output remained below its prepandemic level. The drop off was particularly sharp in September, down 0.6 percent from the previous month, although that number was affected by the death of Queen Elizabeth II, which resulted in widespread, unplanned business closures.

Britain, like most countries in Europe, is suffering from the twin plagues of rising inflation and slowing or declining growth. The war in Ukraine and retaliatory sanctions against Russia, one of the world’s biggest energy and grain producers, has caused fuel, food and fertilizer prices to soar. Supply chain disruptions rooted in the pandemic and ongoing Covid-19 lockdowns in China — most recently in the manufacturing hub of Guangzhou — have also exacerbated economic difficulties, as have shifting consumer preferences and climate-related disasters.

Article source: https://www.nytimes.com/2022/11/11/business/economy/uk-economy-gdp-recession.html