After the summer, UK’s economy contracted, UK is now at the brink.

After the latest GDP figures showed a 0.2% contraction in the quarter to September, the UK economy is closer to official confirmation that it is in recession.

Manufacturing and retail were badly hit – signs that both businesses and consumers are reining in spending.

Two consecutive quarters of negative growth is usually considered a recession.

Data from the Office for National Statistics estimated a 0.6% drop in September itself, although highlighted the impact of the bank holiday for the Queen’s funeral.

Chancellor Jeremy Hunt will deliver the Government’s Autumn Statement on Thursday as he attempts to respond to the global economic conditions and repair the damage to the domestic economy of the impact of Liz Truss and Kwasi Kwarteng’s mini-Budget.

Responding to the latest GDP figures, Hunt said: “I am under no illusion that there is a tough road ahead – one which will require extremely difficult decisions to restore confidence and economic stability. To achieve long-term sustainable growth, we must control inflation, balance the books, and reduce our debt. There is no other way.

“While the world economy faces extreme turbulence, the fundamental resilience of the British economy is cause for optimism in the long run.”

The UK economy doesn’t start in a strong place. According to the ONS, the current level of quarterly GDP is 0.4% below its preCovid level.

The Bank of England has forecast a long recession and earlier this month said the UK will “remain in recession throughout 2023 and 2024 H1, and GDP is expected to recover only gradually thereafter”.

The Bank had previously predicted a 0.5% drop, followed by a 0.3% decline in the final quarter in 2022. However, the contraction of 0.2% in the third quarter was less than expected.

ONS director of economic statistics Darren Morgan said: “With September showing a notable fall partly due to the effects of the additional bank holiday for the Queen’s funeral, overall the economy shrank slightly in the third quarter.

“The quarterly fall was driven by manufacturing, which saw widespread declines across most industries.

“Services were flat overall, but consumer-facing industries fared badly, with a notable fall in retail.”