UK Gross Domestic Product (GDP) fell by 0.1% in the three months to end June amid warnings of impending recession.National Statistics (ONS) said.
This drop follows her 0.8% rise in GDP in the first quarter of this year.
ONS's latest figures show that the services sector has been hit particularly hard, declining 0.4% in the second quarter. With less money spent fighting Covid-19, a significant portion of this decline was spent on health and social work.
ONS Director of Economic Statistics Darren Morgan said:
"While many retailers also had a tough quarter, health was the number one reason the economy contracted as both testing and tracking and vaccine programs were curtailed.
"These were partially offset by an increase in hotels, bars, hair salons and outdoor events throughout the quarter, which was also a result of people celebrating their Platinum Jubilee."
The Bank of England and financial experts predict the UK could enter a recession later this year, and the economic downturn is expected to get worse.
"While we are seeing increasing signs of underlying weakness in the economy, we expect a deeper recession to occur only towards the end of the year," said KPMG UK Chief Economist. said Yael Serfin.
In response to his latest GDP figures, Prime Minister Nadim Zahawi tried to strike a positive tone. “Our economy has shown incredible resilience after the pandemic and we are confident we will be able to weather these global challenges again,” he said.
24} However, he acknowledged that the cost of living crisis is having a major impact on households across the country. That is why I am determined to work with the Bank of England to curb inflation and grow the economy.”Predictions on higher energy price caps have heightened inflation concerns.
Earlier this week, Cornwall Insight, which analyzes the energy market, said that when Ofgem raised its price cap, the average household's annual energy bill was £3,582 from October and £4,266 from January. Presumed to jump up.
Experts are calling on governments to do more to help vulnerable households, but there is no concrete plan to help the public cope with burgeoning costs.
Labor Front Venture Rachel Reeves accused the government of not having a plan to stabilize the economy.
``The economy is shrinking. Inflation soaring, it's more clear than ever that the Conservatives have lost control of the economy," the shadow prime minister said.
"With the Bank of England predicting a recession that will last through the next year, the Conservative leadership candidates have decided to stop playing in the gallery and make serious plans to get the UK economy back on track. We need to start thinking," she added.
