After updated data revealed that the UK economy maintained a positive balance in the second quarter, it may not be considered to be in a formal recession.
Initial projections indicated that between April and June, GDP decreased by 0.1%, however those figures have now been revised to reflect a 0.2% increase.
As a consequence, despite what the Bank of England said earlier this month, UK plc may not be in a technical recession, which is defined as two consecutive quarters of decline.
The fact that the economy was still smaller than it was before to the Covid issue contributed significantly to the better result for April to June despite a more pessimistic appraisal of the prior performance.
Instead of the 9.3% predicted earlier, the Office for National Statistics (ONS) now thinks the pandemic caused an 11% decline in 2020.
In light of the fact that the post-First World War recession had a 9.7% unemployment rate, this makes it the worst downturn since the Great Frost in 1709. The magnitude of the strike had already been lowered from its original designation as the largest in 300 years.
According to the ONS’s most recent estimate, GDP is actually 0.2% less than it was before to Covid.
The organization said as a consequence that the UK is the only G7 nation that has not reclaimed ground from Covid.
When the Bank of England predicted a further decrease of 0.2% for the three months leading up to September, it seemed to be implying that the UK was presently in a recession.
But according to the latest ONS data, even if the economy contracts as expected this quarter, a recession won’t yet have set in.
Improvements in the health and finance sectors, according to the ONS, were what caused the upward adjustment.
Grant Fitzner, chief economist at the ONS, said that the economy expanded in the second quarter after a minor decline in the first.
They also demonstrate that, despite a recent decline in family savings, families saved more during and after the epidemic than we had previously predicted.