UK economic growth downgraded for second quarter
Growth in the UK economy was revised downwards on Monday after fresh figures revealed economy expanded less than initially thought in the second quarter.
The Office for National Statistics (ONS) cut the UK’s economic growth in the three months to June to 0.2 per cent from 0.3 per cent previously.
The third quarter’s sluggish 0.1 per cent expansion was left unchanged.
Liz McKeown, director of economic statistics at the ONS, said the updates figures “paint the same picture as our initial estimate, with growth continuing to slow in the third quarter.”
The revision mark a blow to Chancellor Rachel Reeves, whose efforts for growth thus far this year have yet to flourish.
“Growth in services were particularly offset by falls in production, with a marked drop in car manufacturing,” McKeown said.
UK disposable income takes steep fall
The economy was hammered by the cyber attack on Jaguar Land Rover in September, which is estimated to have cost the UK around £1.9bn after production shuddered to a halt.
Research from the Cyber Monitoring Centre (CMC), a non-profit group that tracks major cyber incidents, around 5,000 organisations across the country were affected by the fallout of the attack.
The Office for National Statistics (ONS) said on Monday that real household disposable income per head (RHDI) – which measures the money households have left after taxes and benefits, adjusted for inflation – had decreased by 0.8 per cent in the third quarter.
This followed zero growth in RHDI in the second quarter and a contraction of 0.9 per cent in the first quarter.
Earlier this month, fresh figures released the UK economy unexpectedly shrank 0.1 per cent in October, despite economists pencilling in 0.1 per cent growth.
It came as production output shrank 0.5 per cent, whilst construction contracted 0.3 per cent.
The all-important services sector, which is estimated to make up over 80 per cent of the economy, did not grow at all.
Analysts quickly sounded the alarm that the UK economy was heading closer to a “technical recession” with pressure piling on the Bank of England to cut interest rates.
The Bank cut rates to 3.75 per cent – a three-year low – last Thursday, in an effort to give a shot of life to the ailing economy.