UK GDP data for September confirm that the economy contracted by 0.2% through Q3 as a whole. Pandemic-related lockdowns aside, that was the weakest reading for a single quarter since 2009 Q2, when the UK economy was beginning to emerge from the depths of the global financial crisis. If, as Fathom suspects, the UK economy is entering recession, downward revisions to early estimates of GDP are likely. Our chart highlights that the UK has underperformed other major economies since the pandemic, despite putting in place more generous fiscal support packages than much of the rest of Europe. A shrinkage in potential supply following the loss of migrant workers associated with Brexit is probably part of the explanation. It is notable that gross value added in the hospitality industry, which historically employed a significant number of EU nationals, is more than 10% below levels seen at the end of 2019.
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