The UK economy will get worse before it gets better, Chancellor Jeremy Hunt has said after figures revealed it shrank further between August and October.
The economy contracted by 0.3% during the three months as soaring prices hit businesses and households and the UK is expected to be heading into recession.
He said: "These figures confirm that this is a very challenging economic situation here and across the world.
"And it will get worse before it gets better."
Over the three months, economic activity in the UK slowed across all the main sectors including production, construction and services.
A country is in recession when its economy shrinks for two three-month periods in a row.
The UK is widely expected to be in recession by the end of this year. The Bank of England recently said the UK is facing its longest downturn since records began.
When a country is in recession, it's a sign that its economy is doing badly. During a downturn, companies typically make less money and the number of people unemployed rises. Graduates and school leavers also find it harder to get their first job.
It means the government receives less money in tax to use on public services such as health and education.
There was a brief respite in October alone when the economy grew by 0.5%, according to the Office for National Statistics (ONS). This compared to September when output fell because of an additional bank holiday for Queen Elizabeth's state funeral.
It meant that some businesses closed or had shorter opening hours.
During the third quarter, which is measured between July and September, the economy shrank by 0.2%. If it continues to shrink between October and December, otherwise known as the fourth quarter, the UK will officially be in recession.
Martin Beck, chief economic adviser to the EY Item Club, said that although this current quarter had started positively with October's rise, there is "a good chance" the economy will contract.
"The near-term outlook remains gloomy, as consumers continue to struggle under the weight of high inflation and with much of the impact of this year's interest rate rises still to be realised," he said.
Last month, the Bank of England raised interest rates from 2.25% to 3% - the biggest jump since 1989. The Bank is expected to announce a further increase on Thursday by half a percentage point to 3.5%.
Labour's shadow chancellor Rachel Reeves said Monday's figures "underline the failure of this Tory government to grow our economy, leaving us lagging behind on the global stage".
Darren Morgan, director of economic statistics at the ONS, said that some companies had said that strike action had affected their business.
"We speak to about 40,000 businesses every fortnight and one in eight of them tell us they were affected by industrial action in October," Mr Morgan told the BBC's Today programme.
"They told us the most common impacts were they were not able to get the necessary goods or services and were unable to operate fully."
UK economy will get worse before it gets better, warns chancellor - BBC
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