UK Heading Into Recession as Economy Shrinks in Third Quarter

The UK is languishing under the cost-of-living crisis prompted by sanctions on Russian fuel, food and fertiliser imports, with the Consumer Price Index (CPI) rate of inflation running at over 10 per cent and energy bills multiplying — forcing many small businesses to close.

The UK is on course for a recession after the economy contracted by 0.2 per cent between July and September.

The Office for National Statistics (ONS) announced the slump in gross domestic product (GDP) in the third quarter.

That backed up the Bank of England's assessment last week that the UK was already in a recession — defined as two consecutive quarters of negative growth — when it raised interest rates by a nearly-unprecedented 0.75 per cent in a bid to tame rampant inflation fuelled by the energy crisis.

Chancellor of the Exchequer Jeremy Hunt said the news would mean austerity measures than those he instituted after replacing his short-live predecessor Kwasi Kwarteng in October.

"I am under no illusion that there is a tough road ahead — one which will require extremely difficult decisions to restore confidence and economic stability," Hunt said. "But to achieve long-term, sustainable growth, we need to grip inflation, balance the books and get debt falling. There is no other way."

The chancellor sought to blame the looming recession on Moscow — and not Western sanctions and embargoes on Russia's fossil fuel exports in response to its military operation in Ukraine.

Russia has repeatedly refuted the accusations it has been receiving from the West concerning its alleged fault in Europe's energy crisis. Russian President Vladimir Putin as well as other high-ranking Russian officials have stressed many times that Europe's energy crisis had started long before the beginning of Russia's special military operation in Ukraine. Global energy prices began to rise in the fall of 2021. It happened due to a wide range of factors, among them growing energy demand, unusually cool weather and the countries' failure to stock up on natural gas during summer months, as well as rising competition for a shrinking pool of supply between Europe and Asia.