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.
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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.
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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.
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2:16
UK economy goes into reverse
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.
Scientists are turning detective to work out what British dolphins are up to beneath the waves – by using forensic-style DNA techniques on their poo.
Conservationists have been studying the 250 or so bottlenose dolphins living in Cardigan Bay, west Wales, over many decades.
Up to now, they have only been able to observe the dolphins as they surface to breathe or play, identifying the animals from the unique marks on their dorsal fins to establish which animals were hanging out together and where.
Image: Dolphins in Cardigan Bay. Pic: Sarah Perry/WTSWW
But now for the first time scientists are using DNA excreted by the dolphins in their poo to build a more complete picture of their lives.
It allows them to identify the sex of individuals and how they are related to other animals. Signficantly, it also shows what the dolphins have been eating.
Image: Dolphin poo. Pic: Sarah Perry/WTSWW
Dr Sarah Perry, marine conservation manager at The Wildlife Trust of South and West Wales, said: “In order to be able to conserve them, we need to know why they’re here and a big a missing part of that is, what they’re feeding on.
“Is that changing at different times of the year? Are certain species of fish more important to them early on in the year, in the spring, and the summer months, and then does that change over the autumn and winter months?
“Are certain species important for younger animals? We don’t know that, so that kind of information, we need to find out.”
Image: Dr Sarah Perry
Catching dolphin poo involves a large element of luck.
The animals occasionally eject a cloud of waste material as they swim.
But it quickly sinks, so the scientists’ boat needs to be close enough for them to scoop it out of the sea with a fine-meshed net.
A sample is then sent to a lab at the University of Aberystwyth, where DNA is extracted for analysis.
Results so far suggest the dolphins are having to adapt to a change in fish species as the water warms.
Image: Dr Niall McKeown
Dr Niall McKeown, a marine biologist at the university, said: “We are seeing large amounts of sardine, sprat, and anchovy.
“This is quite interesting because these are species that are known to have increased in abundance in Welsh waters in recent years in response, we believe, to climate change.”
Image: Dr Niall analyses a sample
Scientists unsure why dolphin numbers are falling
But questions remain about the dolphins.
The number in Cardigan Bay seems to be falling, but scientists are not sure whether that’s a natural cycle or a response to other factors.
Boat noise and disturbance from some fishing activities, such as scallop dredging, could impact the animals, which rely on sound to communicate.
Dr Parry said: “How lucky are we to have such an important population of dolphins here? It’s crazy that we really don’t know that much about them.”
Sir Alan Bates has accused the government of presiding over a “quasi kangaroo court” for Post Office compensation.
Writing in The Sunday Times, the campaigner, who led a years-long effort for justice for sub-postmasters, revealed he had been given a “take it or leave it” offer that was less than half of his original claim.
“The sub-postmaster compensation schemes have been turned into quasi-kangaroo courts in which the Department for Business and Trade sits in judgement of the claims and alters the goal posts as and when it chooses,” he said.
“Claims are, and have been, knocked back on the basis that legally you would not be able to make them, or that the parameters of the scheme do not extend to certain items.”
More than 900 sub-postmasters were prosecuted between 1999 and 2015 after faulty Horizon accounting software made it look as if money was missing from their accounts.
Many are still waiting for compensation despite the previous government saying those who had their convictions quashed were eligible for £600,000 payouts.
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‘It still gives me nightmares’
After the Post Office terminated his contract over a false shortfall in 2003, Sir Alan began seeking out other sub-postmasters and eventually took the Post Office to court.
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A group litigation order (GLO) scheme was set up to achieve redress for 555 claimants who took the Post Office to the High Court between 2017 and 2019.
Sir Alan, who was portrayed by actor Toby Jones in ITV drama Mr Bates Vs The Post Office, has called for an independent body to be created to deliver compensation.
He added that promises the compensation schemes would be “non-legalistic” had turned out to be “worthless”.
It is understood around 80% of postmasters in Sir Alan’s group have accepted a full and final redress, or been paid most of their offer.
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‘Lives were destroyed’
A Department for Business and Trade spokesperson told Sky News: “We pay tribute to all the postmasters who’ve suffered from this scandal, including Sir Alan for his tireless campaign for justice, and we have quadrupled the total amount paid to postmasters since entering government.
“We recognise there will be an absence of evidence given the length of time which has passed, and we therefore aim to give the benefit of the doubt to postmasters as far as possible.
“Anyone unhappy with their offer can have their case reviewed by a panel of experts, which is independent of the government.”
Sir Keir Starmer could decide to lift the two-child benefit cap in the autumn budget, amid further pressure from Nigel Farage to appeal to traditional Labour voters.
The Reform leader will use a speech this week to commit his party to scrapping the two-child cap, as well as reinstating winter fuel payments in full.
There are now mounting suggestions an easing of the controversial benefit restriction may be unveiled when the chancellor delivers the budget later this year.
According to The Observer, Sir Keir told cabinet ministers he wanted to axe the measure – and asked the Treasury to look for ways to fund the move.
The Financial Times reported it may be done by restoring the benefit to all pensioners, with the cash needed being clawed back from the wealthy through the tax system.
The payment was taken from more than 10 million pensioners this winter after it became means-tested, and its unpopularity was a big factor in Labour’s battering at recent elections.
Before Wednesday’s PMQs, the prime minister and chancellor had insisted there would be no U-turn.
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1:20
Will winter fuel U-turn happen?
Many Labour MPs have called for the government to do more to help the poorest in society, amid mounting concern over the impact of wider benefit reforms.
Former prime minister Gordon Brown this week told Sky News the two-child cap was “pretty discriminatory” and could be scrapped by raising money through a tax on the gambling industry.
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Brown questioned over winter fuel U-turn
Mr Farage, who believes Reform UK can win the next election, will this week accuse Sir Keir of being “out of touch with working people”.
In a speech first reported by The Sunday Telegraph, he is expected to say: “It’s going to be these very same working people that will vote Reform at the next election and kick Labour out of government.”