The GDP of the country fell by 0.1% in the second quarter of this year, according to official data released on Friday. The Bank of England predicted a recession last week, but analysts believe it has already begun.
The Office for National Statistics said that the decline was caused by a 0.4% drop in the service sector, mostly in health services and wholesale and retail trade.
The average energy bill for millions of UK households is expected to hit 5,277 $6,396 next spring, after Ofgem, the country's energy regulator, adjusts its price cap, the maximum amount suppliers can charge for each unit of energy, according to estimates released Friday by energy research firm Auxilione.
The average household energy bill hit 4,266 $5,177 a year from January, which is equivalent to about 355 $431 a month, according to research firm Cornwall Insight. According to the figures, the End Fuel Poverty Coalition EFPC believes that the incomes of nearly one third of UK households will fall below the poverty line after they've paid their energy. Between April and June of next year, the price cap is due to be adjusted again, so the Auxilione estimate breaks down to about 440 $533 spent on gas and electricity per month. The UK household energy bills have gone up 54% this year as a result of rocketing wholesale costs, worsened by Russia's invasion of Ukraine in late February. In May, the government announced a 15 billion $18 billion package of support, including a 400 $485 payment to 29 million households from October, to ease the burden of energy bills. As energy price forecasts ballooned, many anti-poverty campaigners say the support does not go far enough. Simon Francis, coordinator for the EFPC, said on Tuesday that Cornwall Insights' most recent price estimate meant that the current level of government support was a drop in the ocean. The GDP drop in the second quarter was slightly smaller than predicted by analysts. It came just one week after the Bank of England said it expected the country to fall into a recession in the autumn, and for it to last through 2023. The National Institute of Economic and Social Research said on Friday that the UK economy has entered a recession in the second quarter. It added that in the next three quarters it expects output to fall over the next three quarters. Other analysts held off calling the start of a recession, but are still pessimistic about where the world's fifth largest economy is headed. Holger Schmieding, chief economist at bank Berenberg, said the new data was a prelude to a recession. In a Friday note, he said that the UK's output will slide further in the coming quarters because of the squeezed inflation and tighter monetary policy.