UK is not in recession, claims Office of National Statistics data

Office of National Statistics (ONS) claimed a 0.2 per cent rise in economic output between April and June. The data was revised from a previous figure of -0.1 per cent. The revised official statistics suggest the UK is not experiencing a recession, as the Bank of England predicted earlier in September.

However, compared to before the pandemic, the economy remains weaker. This is due to the fact that the economy was affected by COVID to a greater extent than previously believed, and it shrank more than anticipated in the early months of the pandemic.

As a result, the ONS said the pre-pandemic levels of the economy were 0.2% greater than the current level, whereas it had suggested earlier that the current economy was 0.6 per cent bigger.


Grant Fitzner, ONS chief economist, commented that these more accurate data demonstrate that the economy expanded in the second quarter after a modest decline.



Following the most recent round of national account revisions, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, stated that the fall in economic activity throughout 2020 seems considerably worse than previously believed, and the ensuing recovery even weaker.

FAQs

1. What did the Bank of England predict about the UK economy?
   The Bank of England has cautioned that the UK might already be in a recession. The economy was believed to have contracted in the preceding quarter when the bank forecasted a 0.1 per cent decline from July to September.
2. What do the revised ONS figures demonstrate?
   They demonstrate that, despite a recent decline in household savings, households saved more during and after the epidemic than previously predicted.