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Crisis mode: Customers shop for food items inside a Tesco supermarket in east London. The UK’s economic backdrop is deteriorating rapidly as the surge in inflation makes consumers more cautious about spending. — AFP

LONDON: The UK economy probably shrank for the first time since the nation was in a coronavirus lockdown at the start of 2021, adding to pressure for action from the contenders vying to take over as prime minister.

Gross domestic product (GDP) for the second quarter probably shrank 0.2%, according to a survey of economists by Bloomberg News ahead of the official figures due to be published soon.

The drop would mark a pause in the recovery from the pandemic and the start of a more protracted downturn, which the Bank of England (BoE) expects to last into early 2024.

That outlook is roiling the race to replace Boris Johnson as leader of the ruling Conservative Party and prime minister.

Liz Truss and Rishi Sunak, who are competing in the race set to conclude in September, spent the weekend promoting their ideas to help.

The central bank last week forecast that inflation will accelerate past a 40-year high to more than 13% this year, weighing heavily on consumer spending power.

Former prime minister Gordon Brown and the BoE’s former chief economist Charlie Bean this weekend added their voices pushing for an aid package that would help those hardest hit.

They said the measures Johnson’s government brought forward earlier this year aren’t enough.

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“The main package for households was worth about £15bil (RM80.6bil), and there is certainly a case for something of at least that magnitude again,” Bean said in an interview on Times Radio.

Brown called for an emergency budget, warning that almost half of all households will tip into fuel poverty this winter because of a surge in the cost of electricity and natural gas.

“A financial time bomb will explode for families in October as a second round of fuel price rises in six months sends shock waves through every household and pushes millions over the edge,” Brown wrote in the Observer newspaper.

The remarks and the outlook for rising natural gas prices add to the pressure on Truss and Sunak to explain what they would do to revive the economy.

Truss, the frontrunner, has said she’d push through immediate tax cuts to help.

Sunak, the former chancellor of the exchequer, said those measures would take too long to implement and wouldn’t help enough of those most in need.

A YouGov poll published on the front page of the latest edition of the Times, which is backing Sunak, suggested that most voters would rather the next prime minister focus on tackling inflation and the looming cost-of-living crisis rather than slashing taxes.

The economic backdrop is deteriorating rapidly as the surge in inflation makes businesses and consumers more cautious about spending.