UK economy avoids recession as GDP unexpectedly inches up 0.2%

THE UK economy grew 0.2% over the three months to June, the Office for National Statistics has revealed.

The ONS previously said there was a 0.1% fall in Gross Domestic Product (GDP) for the quarter – between April to June.

The economy unexpectedly grew over spring and early summer

The economy unexpectedly grew over spring and early summer

It means the economy grew slightly when previously it was thought to be shrinking.

It indicates the country is not currently in a recession.

The Bank of England warned that the economy will officially enter recession by the end of the month.

A country is in recession when its economy shrinks over a sustained period of time, rather than growing normally.

It takes two consecutive quarters of decline for economists to qualify a downturn as recession.

The services and construction sectors were the key drivers behind marginal growth.

The services sector grew output by 0.2%, which went up to 1.1% for construction.

Meanwhile, growth has been “easing” in the science, retail and health industries.

The UK’s recovery from the fallout of Covid has also been revised down in the ONS’ latest figures.

“The level of real GDP is now estimated to be 0.2% below where it was pre-coronavirus at Quarter 4 2019, downwardly revised from previous estimates of 0.6% above,” the ONS said.

It comes as the UK’s financial markets have taken a battering this week after new prime minister Liz Truss and Chancellor Kwasi Kwarteng revealed a tax cuts bonanza in the mini Budget.

The value of the pound tumbled after the swathe of tax cuts were revealed.