The Office for National Statistics (ONS) has revealed that the UK economy contracted by 0.1% in the second quarter of the year.
However, the figure recorded according to the ONS, was much better than the 1.3% fall predicted by economists.
For June alone, the ONS stated that the economy shrank by 0.6% due to the extra bank holiday to celebrate the Queen’s Platinum Jubilee.
But the ONS revealed that it had “little impact” on the quarterly figure.
Commenting on the 0.1% contraction, the ONS said that the biggest contributor was from “human health and social work activities” as COVID test and trace and vaccination programmes were wound down.
Areas such as tourism, bars and entertainment showed strong growth.
“Health was the biggest reason the economy contracted as both the test and trace and vaccine programmes were wound down, while many retailers also had a tough quarter,” said director of economic statistics at the ONS, Darren Morgan.
“These were partially offset by growth in hotels, bars, hairdressers and outdoor events across the quarter, partly as a result of people celebrating the Platinum Jubilee.”
The Chancellor, Nadhim Zahawi, told the BBC that these are “challenging times”.
“What the numbers show today is that the contraction is partly because of some of the COVID activities reducing but also real resilience in the private sector which actually in many ways bodes well… But nevertheless these are challenging times,” he said.
But Labour accused the Conservatives of “losing control of the economy”.
Shadow Chancellor Rachel Reeves said: “With the Bank of England forecasting a recession lasting the whole of next year, the Conservative leadership contenders need to stop playing to the gallery and start coming up with a serious plan to get Britain’s economy back on track.”
The Bank of England has forecast the UK will fall into recession towards the end of this year and the downturn will last for the entirety of next year.