Britain records worst production output decline since first COVID lockdown

Output across much of the British economy has fallen to its lowest level since May 2020 as inflation weighs on demand, according to an analysis by Lloyds Bank.

"Twelve of the fourteen key sectors across manufacturing, services and construction experienced a drop in output in October, up from nine in September and the highest number to report contraction since the first lockdown", the bank’s data says, Caliber.Az reports, citing The Times.

The technology sector was a rare bright spot, with providers of software services reporting a rise in new orders. It was followed by the food and drink industry, which had the slowest fall in demand of any manufacturing sector.

Last week alongside the autumn statement the government’s independent financial forecaster the Office for Budget Responsibility gave a bleak assessment of the economy. It said that Britain was already in recession and it predicted that growth would shrink by 1.4 % next year. In 2024 it said that the economy would grow by only 1.3 %, a sharp downgrade from previous expectations.

This economic downturn is unusual because it is coupled with record-low levels of unemployment. For the three months to September, the rate of those out of work stood at only 3.6 %.

The Lloyds Bank survey found that employment had risen at the slowest rate in 20 months and the overall manufacturing sector had recorded its first drop in headcount since December 2020.