Business

UK economy sees steeper slowdown in third quarter

Experts expect the UK economy to contract in December.

UK economic growth slowed more sharply than first thought between July and September, before the impact of the new Omicron variant of coronavirus, official figures show.

The Office for National Statistics (ONS) said the economy expanded by 1.1 per cent in the third quarter, compared with an initial estimate of 1.3 per cent.

This marks a sharp pullback on growth in the second quarter, when UK output increased by a revised 5.4 per cent following the easing of Covid-19 restrictions.

Experts expect the economy to contract in December as consumers retrench in the face of the new variant sweeping across the UK and restrictions to control it, with fears that further measures could also affect the first quarter of 2022.

But the ONS said the UK economy has recovered more ground towards where it was before the pandemic struck thanks to a stronger rebound than first thought in 2020, and is now 1.5 per cent below where it was at the end of 2019.

Darren Morgan, ONS director of economic statistics, said: "Our revised figures show UK GDP recovered a little slower in the third quarter, with much weaker performances from health and hairdressers across the quarter, and the energy sector contracting more in September than we previously estimated.

"However, stronger data for 2020 means the economy was closer to pre-pandemic levels in the third quarter.

"With the economy reopening in the third quarter, households saved less in the latest period.

"However, household saving was still up on pre-pandemic levels."

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