Economy shrinks unexpectedly in August by 0.3%, Office for National Statistics figures show
The economy unexpectedly shrank in August, contracting by 0.3% on the previous month.
The growth in July has also been revised downwards, from the previously recorded 0.2% to 0.1%.
The Office for National Statistics released its latest reading on the UK’s performance as the government frets over the prospect of recession ahead, given the toll placed on demand by the cost of living crisis.
The result for August is worse than expected, as no growth rather than shrinking was anticipated.
It is likely that the contraction will result in a sharper period of slowdown in September.
“August’s negative out-turn should be followed by a more marked drop in September’s output as the extra bank holiday for the Queen’s funeral will have added to the downwards pressure on activity,” Suren Thiru, economics director of the Institute of Chartered Accountants in England and Wales, said.
Commentators now suspect the UK is nearing a recession.
“UK economy teetering on the edge of recession,” Yael Selfin, chief economist at KPMG UK, said.
“The ongoing squeeze on household finances continues to weigh on growth, and likely to have caused the UK economy to enter a technical recession from the third quarter of this year.”
Mr Thiru added: “The government has needlessly risked a longer recession with any boost from the energy package likely to be dwarfed by a sustained squeeze on UK output from persistently high inflation, punishing interest rate rises and acute financial market turbulence.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “August’s drop in GDP likely marks the start of a downward trend that will continue deep into next year.”
The ONS figures were dismissed as estimates by Jacob Rees-Mogg, the business secretary, who told Sky News that “figures that are released immediately are very often revised”.
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Jacob Rees-Mogg on Kay Burley
Action by the Bank of England to tame inflation, through successive interest rate increases, is adding to the cost burden for borrowers.
The Bank’s tightening has placed its mandate to control inflation at odds with the agenda of the new Truss administration, which has set a target for annual economic growth of 2.5%.
The mini-budget last month, which contained energy bill help for households and businesses along with a series of tax cuts, prompted turmoil on financial markets.
The resulting crisis of credibility forced down the value of the pound and raised government borrowing costs to such an extent that the Bank had to intervene.
The International Monetary Fund warned on Tuesday that the government should ensure its tax and spending plans are in line with the Bank of England’s inflation-fighting remit.
In other words, the priority should be tackling inflation rather than adding to the price problem through tax giveaways to achieve economic growth.
The IMF welcomed the prospect of an earlier-than-expected debt plan from Kwasi Kwarteng, the chancellor.
That will now be delivered to MPs on 31 October and contain independent analysis from the Office for Budget Responsibility.
Responding to this morning’s announcement, Mr Kwarteng said the UK was facing global challenges that his government’s growth plan will address.
“Countries around the world are facing challenges right now, particularly as a result of high energy prices driven by Putin’s barbaric action in Ukraine,” he said.
“That is why this government acted quickly to put in place a comprehensive plan to protect families and businesses from soaring energy bills this winter.
“Our Growth Plan will address the challenges that we face with ambitious supply-side reforms and tax cuts, which will grow our economy, create more well-paid skilled jobs and in turn raise living standards for everyone.”
Comedy writer Bill Dare, – who worked on shows including Spitting Image and Dead Ringers – has died after an accident overseas, his agent said.
Described as a “super producer” by his peers, Dare, 64, worked on eight series of hugely popular satire puppet show Spitting Image.
Airing on ITV during the 1980s and 1990s, the show delighted in lampooning public figures including politicians, celebrities and royalty, winning BAFTAs and Emmys. It was rebooted in 2020.
Dare also created Dead Ringers, a comedy impressions show broadcast on BBC Radio 4.
He also produced The Now Show, a satirical take on the news which ran on Radio 4 from 1998 to 2024.
Dare worked on a wide range of comedy shows during his career, including the radio production of The Mary Whitehouse Experience in the late 1980s and early 1990s. He had also written several novels.
In a statement released on Monday, his agent JFL Agency confirmed he died at the weekend.
A spokesperson said: “We are shocked and greatly saddened to have to announce the death of our brilliant client Bill Dare, who died at the weekend following an accident overseas.
“Our thoughts are with his wife Lucy, daughter Rebecca, and with all of Bill’s family and friends who will be devastated by his loss.
“Bill was a truly legendary producer and writer, and his comedy instincts were second to none.”
Oasis depicted on Spitting Image in 1996. Pic: ITV/Shutterstock
Colleagues were quick to pay tribute and reflect on his talent.
Impressionist Jon Culshaw wrote on X: “It’s impossible to express the unreal sense of loss at the passing of the incredible Bill Dare. The wisest comedy alchemist and the dearest, dearest friend. Much love to Lucy and all Bill’s family and friends. We shall all miss him more than we can say.”
David Baddiel posted on the social media platform: “Just heard that the original producer of The Mary Whitehouse Experience on radio, Bill Dare, has died. Bill was an amazing creative force. I owe him much. RIP.”
Former EastEnders actress Tracy-Ann Oberman said she was “devastated” and that her “entire comedy career was down to Bill”.
She wrote: “When I was on the BBC Radio 4 rep company early on in career – I ran into Bill in the corridors – He asked if I was good at accents. I said yes.
“He cast me in a sketch show. I had to do about 15 different accents. We recorded in front of a live audience at Broadcasting House – afterwards Bill said ‘Why have I never met you – you’re going to have a big career’.
“He was incredibly loyal and supportive and really opened a path for me into the R4 comedy world and then TV having come out of the RSC and theatre it was all new. I will always be grateful. Fly high Bill.”
Comedian and writer Mark Steel wrote: “This is so grim. Bill was a compassionate hearty soul with the ability to be beautifully grumpy, a marvellously thoughtful comic mind.
“He’d argue but always listen and you’d always laugh, he made a million shows and wanted them all to matter and would have made a million more.”
Have I Got News for You writer Pete Sinclair said: “I am utterly devastated by Bill’s death. I still can’t believe it. He was a comedy genius. A hugely talented writer as well as a brilliant producer. A close friend and co-writer. I cannot begin to say how much I’ll miss him.”
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Julia McKenzie, comedy commissioner for Radio 4, said: “I am so terribly sorry to hear this tragic news and my thoughts are with Bill’s wife, family and friends.
“Bill has been a huge part of Radio 4 comedy for decades, as a writer and producer, and listeners will have heard his legendary name at the end of many of their favourite shows.
“Bill was a comedy obsessive, and very instinctive about making the funniest choices when it came to writing, directing and editing.
“He cared so much about his work that in the production booth during Dead Ringers you’d see him crouched over the script, utterly focused on the show.
“He was funny and very dry in person, amusingly cynical when he needed to be and always pushed to keep the comedy he made, and particularly satire, spiky.
“I’ve known and worked with him for 18 years and like many I can’t believe he has gone, he will leave a big hole in the comedy world and in our hearts.”
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