Preliminary figures from the Office of National Statistics have confirmed that the UK economy is in decline and officially heading for a recession.
According to the statistics, the chained volume measure of gross domestic product (GDP) fell by 0.5 per cent between July and September this year compared to the previous quarter.
A recession is usually defined as a decline in GDP for at least two consecutive quarters, and although the figures only account for one quarter so far, it is unlikely that the UK economy will recover during this quarter.
The news has hit both the stock market and the pound as fears across the country have finally been confirmed. The drop in output of 0.5 per cent was larger than expected – the biggest since the early 90s.
Commenting on the figures, director of consumer policy at uSwitch.com said: "More than a year after the Credit Crunch began, and today, the UK is one step closer to the inevitable recession. This is the first time we have been in this situation for 16 years, bucking the trend of 64 consecutive quarters of growth."
And, according to Ms Robinson the impending recession is taking its toll on consumers, she said: "20 million people have either cut down or completely stopped taking regular trips to the pub.
"We have also seen almost half of Brits cancelling insurance
contributions in a bid to cut household expenditure and ease financial pressure. This means that potentially just over 19 million people have reduced their financial security, or ditched it entirely, in a bid to claw back some cash."
However, according to Ms Robinson, the fact that Brits are cutting back is making recession more likely, "whilst consumers are trying to be sensible and reign in their finances, it means the decline in spending is also fanning the flames of the forthcoming recession.
"Unfortunately, it's the only course of action consumers can take at the moment. They have lost confidence in the economy, the housing market and the banking sector this year – and it is too soon to tell when this confidence will be restored."
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