UK economy at risk of recession, official figures reveal

Published

2 years ago

December 22, 2023

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The UK economy has performed worse than previously thought and below the expectations of economists, new official figures show, meaning the country has taken the first step towards recession.

There’s been a downward revision to GDP, a key measure of economic growth, the Office for National Statistics (ONS) said on Friday morning.

Rather than remaining stagnant, as first thought, the economy contracted 0.1% in the three months from July to September.

Economists had been expecting growth of 0.2%.

A country is technically in recession after two three-month periods of a shrinking economy.

If the final data for the fourth quarter of 2023, from October to December – which will be released next year – shows a contraction, the country will officially be in recession.

Another amendment was made to the second quarter of this year, from April to June. Rather than growing 0.2%, as was previously announced, the ONS has said there was actually no growth.

Changes were made to the statistics as regular monthly business surveys and VAT returns showed less spending, said the ONS director of economic statistics, Darren Morgan.

Weaker performances from smaller businesses, particularly hospitality and information technology (IT), influenced the adjustments, Mr Morgan said.

In the most recent quarter, film production, engineering and design, and telecommunication all faired “a little worse” than expected.

VAT data takes time to receive and process, he added.

In the latest three-month period there was a 0.2% fall in the large services sector, offsetting a 0.4% expansion in construction output and a 0.1% boost in the production sector.

It amounted to the biggest downturn in consumer-facing services since September 2021 when a COVID lockdown was imposed.

Responding to the figures, Chancellor Jeremy Hunt said: “The medium-term outlook for the UK economy is far more optimistic than these numbers suggest.”

“We’ve seen inflation fall again this week, and the OBR [Office for Budget Responsibility] expects the measures in the Autumn Statement, including the largest business tax cut in modern British history and tax cuts for 29 million working people, will deliver the largest boost to potential growth on record.”

Data also published on Friday morning recorded a far above expectations 1.3% increase in retail sales volumes for November after a possible Black Friday boost. Expectations were for a 0.4% growth.

Retail sales figures are important as household consumption is the largest expenditure across the UK economy.

Business

Lola’s Cupcakes bakes £30m takeover by Finsbury Food

Published

2 hours ago

August 14, 2025

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Lola’s Cupcakes bakes £30m takeover by Finsbury Food

Lola’s Cupcakes, the bakery chain which has become a familiar presence at commuter rail stations and in major shopping centres, is in advanced talks about a sale valuing it at more than £25m.

Sky News has learnt that Finsbury Food, the speciality bakery business which was listed on the London Stock Exchange until being taken over in 2023, is within days of signing a deal to buy Lola’s.

City sources said on Thursday that Finsbury Food was expected to acquire a 70% stake in the cupcake chain, which trades from scores of outlets and vending machines.

Lola’s Cupcakes was founded in 2006 by Victoria Jossel and Romy Lewis, who opened concessions in Selfridges and Topshop as well as flagship store in London’s Mayfair.

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The brand has grown significantly in recent years, and now has a presence in rail stations such as Waterloo and Kings Cross.

The company employs more than 400 people and has a franchise operation in Japan.

Lola’s is part-owned by Sir Harry Solomon, the Premier Foods founder, and Asher Budwig, who is now the cupcake chain’s managing director.

The deal will be the most prominent acquisition made by Finsbury Food since it delisted from the London market nearly two years ago.

Finsbury is now owned by DBAY Advisors, an investment firm.

A spokesperson for Finsbury Food declined to comment.

Business

UK growth slows as economy feels effect of higher business costs

Published

14 hours ago

August 14, 2025

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UK growth slows as economy feels effect of higher business costs

UK economic growth slowed as US President Donald Trump’s tariffs hit and businesses grappled with higher costs, official figures show.

A measure of everything produced in the economy, gross domestic product (GDP), expanded just 0.3% in the three months to June, according to the Office for National Statistics (ONS).

It’s a slowdown from the first three months of the year when businesses rushed to prepare for Mr Trump’s taxes on imports, and GDP rose 0.7%.

Caution from customers and higher costs for employers led to the latest lower growth reading.

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Business

Claire’s to appoint administrators for UK and Ireland business – putting thousands of jobs at risk

Published

1 day ago

August 13, 2025

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Fashion accessories chain Claire’s is set to appoint administrators for its UK and Ireland business – putting around 2,150 jobs at risk.

The move will raise fears over the future of 306 stores, with 278 of those in the UK and 28 in Ireland.

Sky News’ City editor Mark Kleinman reported last week that the US-based Claire’s group had been struggling to find a buyer for its British high street operations.

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Prospective bidders for Claire’s British arm, including the Lakeland owner Hilco Capital, backed away from making offers in recent weeks as the scale of the chain’s challenges became clear, a senior insolvency practitioner said.

Claire’s has now filed a formal notice to administrators from advisory firm Interpath.

Administrators are set to seek a potential rescue deal for the chain, which has seen sales tumble in the face of recent weak consumer demand.

Claire’s UK branches will remain open as usual and store staff will stay in their positions once administrators are appointed, the company said.

Will Wright, UK chief executive at Interpath, said: “Claire’s has long been a popular brand across the UK, known not only for its trend-led accessories but also as the go-to destination for ear piercing.

“Over the coming weeks, we will endeavour to continue to operate all stores as a going concern for as long as we can, while we assess options for the company.

“This includes exploring the possibility of a sale which would secure a future for this well-loved brand.”

The development comes after the Claire’s group filed for Chapter 11 bankruptcy in a court in Delaware last week.

It is the second time the group has declared bankruptcy, after first filing for the process in 2018.

Chris Cramer, chief executive of Claire’s, said: “This decision, while difficult, is part of our broader effort to protect the long-term value of Claire’s across all markets.

“In the UK, taking this step will allow us to continue to trade the business while we explore the best possible path forward. We are deeply grateful to our employees, partners and our customers during this challenging period.”

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Claire’s attraction has waned, with its high street stores failing to pull in the business they used to.

“While they may still be a beacon for younger girls, families aren’t heading out on so many shopping trips, with footfall in retail centres falling.

“The chain is now faced with stiff competition from TikTok and Insta shops, and by cheap accessories sold by fast fashion giants like Shein and Temu.”

Claire’s has been a fixture in British shopping centres and on high streets for decades, and is particularly popular among teenage shoppers.

Founded in 1961, it is reported to trade from 2,750 stores globally.

The company is owned by former creditors Elliott Management and Monarch Alternative Capital following a previous financial restructuring.