UK economy shrank between April and June after growing in first three months of year, ONS says

The UK economy contracted by 0.1 percent between April and June, the Office for National Statistics (ONS) has said

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It compares to growth of 0.8 percent recorded in the previous three months.

Health was put down as the "biggest reason" behind the contraction as the test and trace and vaccine programmes were wound down.

Retailers were also hit hard, despite the Queen's Platinum Jubilee celebrations providing a brief period of respite.

Office for National Statistics 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.

Retailers were hit hard between April and June
Retailers were hit hard between April and June
Chancellor of the Exchequer Nadhim Zahawi
Chancellor of the Exchequer Nadhim Zahawi

“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.”

Despite the bleak outlook, Treasury figures are confident the economy can "pull through" and hope the Government's help can ease the pressure on households.

Chancellor of the Exchequer Nadhim Zahawi said: “Our economy showed incredible resilience following the pandemic and I am confident we can pull through these global challenges again.

“I know that times are tough and people will be concerned about rising prices and slowing growth, and that’s why I’m determined to work with the Bank of England to get inflation under control and grow the economy.

“The Government is providing billions of pounds of help for households with rising costs, including £1,200 for eight million of the most vulnerable households.”

It comes as the Bank of England warns that the UK might enter recession later this year.