After stagnant growth in the second quarter, which was predicted to grow by 0.2%, the latest figures show that GDP dropped 0.1% in Q3, flagging minimal growth throughout the year.

It was originally predicted there would be no growth for this period, instead mirroring the GDP fall from the same quarter of 2022.

The service sector fell 0.2% over the period following a 0.1% drop in Q2. There were drops across key sectors with the information and communication sector being the biggest contributor to the fall. The education sector increased by 0.7%, which was the most positive area.

Production was up by 0.1% with seven out of the 13 subsectors increasing in Q3 with the manufacturing of transport equipment contributing most. This has grown the last four months straight.

Construction was up another 0.4% after an 0.1% increase in Q2. This was mainly driven by a 1.5% increase in repair and maintenance but held back by a 0.4% decrease in new work.

Richard Carter, head of fixed interest research at Quilter Cheviot said: ‘ONS data reveals UK GDP fell by a surprise 0.1% in Q3 compared to the previous quarter, revised down from a first estimate of no growth, highlighting just how much of a strain there currently is on the UK economy.

‘Q2 was also revised down and is now estimated to have shown no growth compared to the 0.2% increase previously estimated, meaning the UK has barely scraped by without a recession in 2023. 

‘Growth is weakening and interest rates are really beginning to bite and while a recession has just been avoided to date, there is no guarantee one will be avoided in 2024. You just have to look at October’s -0.3% reading to see that growth is trending further in the wrong direction.’

Danni Hewson, head of financial analysis at AJ Bell said: ‘The Chancellor might believe that 2024 will be the year the UK throws off its “pessimism and declinism” but it might also be a year that starts in a recession.

‘Revised figures paint a gloomier picture of the country’s economy than we’d been led to believe, as the cost of living crisis and rising interest rates have dented confidence.’