The UK economy contracted by 0.1% between April and June, compared to growth of 0.8% in the previous three months, the Office for National Statistics has said.
Commenting on the gross domestic product (GDP) figures that showed a 0.1% contraction in the second quarter of the year, Office for National Statistics director of economic statistics Darren Morgan said: “With May’s growth revised down a little and June showing a notable fall, overall the economy shrank slightly in the second quarter.
“Health was the biggest reason the economy contracted as both the test and trace and vaccine programmes were wound down, while many retailers also had a tough quarter.
“These were partially offset by growth in hotels, bars, hairdressers and outdoor events across the quarter, partly as a result of people celebrating the Platinum Jubilee.”
Jonathan Moyes, Head of Investment Research, Wealth Club, said: “The UK economy has had its fair share of gloomy economic forecasts in recent weeks, to some extent this has helped to set the scene ahead of an equally gloomy Q2 GDP release. With weakness across all main sectors of the economy, the GDP figures released today will do little to alleviate growing concerns over the health of the UK economy.
"For those looking for some balance within the detail of this release, it was hard to find. Even the construction sector, until recently an area of strength, is showing signs of softening.
"Attention will now no doubt turn to the Bank of England. The current inflationary spike is being driven overwhelmingly by global food and energy prices which, by and large, are outside of the Bank’s control. Higher interest rates in the UK will do little to alleviate those pressures. By looking to stave off any knock-on inflationary pressures, such as higher wages, the Bank risks strangling the life out of the economy without significantly easing the cost-of-living crisis. Whilst the Bank expected a slight contraction in Q2 GDP, the mounting weakness in the UK economy may give it pause for thought before continuing to lift rates higher."
