Economy shrinks 0.1% in Q2 The UK economy shrank 0.1% in the second quarter, data from the Office for National Statistics (ONS) shows. The data also shows that the economy contracted by 0.6% in June. The decline over Q2 was partly attributed to the test and trace and vaccine programmes coming to an end, a fall in retail sales and the Queen's Platinum Jubilee bank holiday in June. ONS director of economic statistics Darren Morgan said: “With May’s growth revised down a little and June showing a notable fall, overall the economy shrank slightly in the second quarter.” Despite the contraction between April and June, the economy avoided recession because GDP grew by 0.8% in the first three months of this year. Reflecting on the data, Capital Economics said there is now a greater risk that the economy will shrink by 0.2% between July and September. However, Goldman Sachs predicts growth of 0.4% in Q3 and HSBC said it expects “a bounce back in July - the reversal of the bank holiday effect - to set the UK up for a positive Q3.” Suren Thiru, economics director for the Institute of Chartered Accountants, warned: "The UK economy is sliding closer to recession and the worst is yet to come."