Trade body claims UK is 'in recession'
This comes as Gross Domestic Product (GDP) showed an estimated fall of 0.2% in Q3 (July to September), a rise of 0.2% on the previous quarter, figures released today (Friday 11 November) by the Office for National Statistics (ONS) have revealed.
NTIA CEO Michael Kill said: “We are in a recession, albeit in its complete definition, consumer facing businesses like hospitality and night-time economy fared badly, which will deepen the levels of uncertainty in the sector and impact consumer confidence even further.
Lack of stability
“It is expected to last for several years and see the economy shrink by up to 1.6%, all of which points to a lack of stability from Government and will place further pressure on the Government to deliver on the budget next week.
“Sectors at the sharpest end of this crisis will require direct support to weather this hugely challenging trading period. Erosion of profits due to onerous costs has led to even the strongest of businesses barely breaking even.”
According to ONS, GDP fell by 0.6% in September 2022 and was affected by the bank holiday for the State Funeral of Her Majesty Queen Elizabeth II, where some businesses closed or operated differently on this day.
Inflation worse than pandemic
The data also showed the services sector slowed to a flat output on the quarter driven by a fall in consumer facing services, which saw a decline of 0.8% during Q3, a deceleration from the 1.2% increase in the previous quarter, while the production sector and household expenditure fell by 1.5% and 0.5% respectively.
Furthermore, the level of quarterly GDP in Q3 this year has now been estimated to be 0.4% below its pre-coronavirus level while the implied GDP Deflator rose by 5.8% compared with the same quarter a year ago, reflecting higher costs pressures faced by households, according to ONS.
Kill added: “With cost inflation being seen as a worse crisis than the pandemic, the budget must have a level of support at least in parallel with support given during the pandemic, with VAT, business rates and energy relief extensions at the top of industry asks.”
