 fell the last three month, official data from the Office for National Statistics (ONS) shows. The UK economy has shrunk GDP measures the value of goods and services produced in the UK. It also estimates the size of and growth in the economy. Today's figures come just a week after the Bank of England warned that the UK could be facing the "longest recession in 100 years". The Bank also predicted inflation would peak at around 11% at the end of this year. While the unemployment rate could hit 6.4% by the end of 2025. The Bank of England (BoE) uses GDP as one of the key indicators when it sets the base interest rate. Last week it unveiled the biggest interest rate rise since the 1980s - increasing rates to 3%. The hike is usually passed on to consumers in the form of higher interest rates on mortgages and other borrowing. Savers could earn more on the cash they have in their accounts, though banks are usually slower to pass on a rate increase on savings. What is a recession? A country is in recession when its economy shrinks over a sustained period of time, rather than growing normally. It is calculated using something called Gross Domestic Product (GDP), which in the UK is the value of all the goods and services added up in pounds. Generally speaking, if the GDP has fallen over two quarters (or six months), a country is said to be in recession. Recessions are bad news, because they usually lead to unemployment and wage stagnation. This in turn means the government gets less tax, which could mean cuts to services and benefits, or that rates go up. There are lots of different factors that can cause a country to tip into a recession. The UK last went into recession in 2020 after the coronavirus pandemic hit.){kind=link}
THE UK economy shrunk by 0.2% between July and September new figures reveal, as experts warn the country is heading for recession.
Gross Domestic Product (GDP) fell in the last three month, official data from the Office for National Statistics (ONS) shows.
GDP measures the value of goods and services produced in the UK.
It also estimates the size of and growth in the economy.
Monthly estimates show that GDP fell by 0.6% in September, which was affected by the bank holiday for the State Funeral of Her Majesty Queen Elizabeth II.