Liz Truss and Rishi Sunak spent the summer fighting it out in the Tory leadership contest, debating how they would make the economy grow. It turns out that, while that discussion raged on, the economy was contracting: GDP fell in August by 0.3 per cent, according to figures from the Office for National Statistics. This is an unexpected dip which is only likely to increase market jitters.
September is likely to be a bad month too
Production output fell by 1.8 per cent, while services dipped by 0.1 per cent overall: of this, arts, entertainment and recreation activities plunged by 5 per cent in total, making it one of the ‘largest contributors’ to the overall fall in services. The August slump comes as a surprise to markets, as the consensus for GDP growth had been for no growth, rather than a fall.
The news comes just a day after the International Monetary Fund released a report which presented a bleak outlook for 2023, stating that, for many people, next year ‘will feel like a recession.’
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