The UK economy had its worst quarter for seven years between April and June, shrinking by 0.2%, the Office for National Statistics said.
The production sector contracted by 1.4% in the second quarter of the year, with the decline driven by a sharp decline in manufacturing output. The services sector provided the only positive contribution to GDP growth, but this was only 0.1%, the weakest growth in the sector in three years.
The contraction, which is set to be the worst of any G7 country, comes after a surprise boost in the first quarter of the year because of Brexit stockpiling before the original March leaving date and is a blow to Prime Minister Boris Johnson’s calls for optimism.
The pound fell after the data was released, with commentators talking of the UK heading into a possible recession just as it leaves the European Union on 31 October. A recession occurs when the economy contracts for two consecutive quarters.
The UK economy has seen slow growth of 0.5% or less in all but one quarter since the Brexit vote in 2016, but the previous stockpiling and the push towards a no-deal Brexit from the Conservative Party in recent months has made businesses feel less confident about investing in the UK and April to June was the first quarter of real-terms decline.