London, November 11 (BNA) The British economy contracted in the three months to September, according to official statistics on Friday, as forecasters warned of several months of deflation ahead.
The Office for National Statistics said GDP fell 0.2% between July and September, a smaller-than-expected contraction that is nonetheless seen as a sign of the start of a prolonged recession.
The Census Bureau said gross domestic product contracted 0.6% in September, and by 0.1% in August.
She said the decline in industrial production and an additional holiday marking the death of Queen Elizabeth II, which contributed to a “significant decline in retail trade”, were behind the decline.
She said the UK economy is now 0.2% smaller than it was in February 2020, before the COVID-19 pandemic shut down large parts of the economy for months.
The Bank of England raised its key interest rate last week by three-quarters of a percentage point, to 3% – its largest increase in three decades, according to the Associated Press.
The central bank said the move was necessary to beat stubbornly high inflation that is eroding living standards and likely to lead to a “prolonged” recession.
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