UK economy contracts 0.1% in second quarter

The UK economy contracted by 0.1% in the second quarter of the year (Apr to June) 2022, according to the latest estimate from the Office for National Statistics (ONS).

On a monthly basis GDP is estimated to have fallen by 0.6% in June 2022, following an increase of 0.4% in May 2022. The ONS said the sharper decline in June reflected two lost work days from the Queen’s platinum jubilee.

In output terms, services fell by 0.4% in Quarter 2 2022 with the largest negative contribution from human health and social work activities, reflecting a reduction in coronavirus activities.

The main positive contributions came from consumer-facing services, such as other service activities – with travel agencies and tour operators doing particularly well as Covid-19 restrictions eased on the tourism industry – accommodation and food service activities, and arts, entertainment and recreation activities.

The ONS figures also show that there was a 0.2% decrease in real household consumption in Quarter 2 2022 with households cutting spending as the cost of living crisis began to have an impact.

Commenting on the figures for Q2 2022, director of Economic Statistics, Darren Morgan said: “With May’s growth revised down a little and June showing a notable fall, overall the economy shrank slightly in the second quarter.

“Health was the biggest reason the economy contracted as both the test and trace and vaccine programmes were wound down, while many retailers also had a tough quarter. These were partially offset by growth in hotels, bars, hairdressers and outdoor events across the quarter, partly as a result of people celebrating the Platinum Jubilee.”