Winter money worries worsen as economy shrinks

Data released by the Office for National Statistics shows the UK economy shrank by 0.3 per cent in August, meaning we’re on the brink of a recession.

ONS figures also showed GDP - a measure of the health and size of a country’s economy - fell more sharply than had been predicted.

While the majority of experts expected a flat August, news of the 0.3 per cent shrinkage follows growth of just 0.1 per cent in July.

It comes after Bank of England governor Andrew Bailey warned its emergency intervention to shore up UK debt will end on Friday, leading to increasing worries about pension funds, which are significant holders of UK government debt and index-linked bonds.

Now business secretary Jacob Rees-Mogg, also complaining about his own mortgage increase, is pointing the finger at the Bank’s interest rate policy and global markets for the whole sorry situation, trying to deflect blame away from Chancellor Kwasi Kwarteng’s mini-Budget.

All these toxic economic ingredients made for a particularly fractious Prime Minister’s Questions as PM Liz Truss faced off against Sir Keir Starmer at the dispatch box.

So, what kind of a financial mess are we in, and how are Londoners coping on the ground ahead of bleak winter?

To help us navigate the latest economic small print and discuss the challenges ahead, the Leader’s joined by Evening Standard business editor Jonathan Prynn.

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