UK economy enters recession

It’s after it contracted by 0.3% in the final three months of 2023

Britain’s economy slipped into a recession at the end of 2023 after output contracted by more than expected in the final three months, according to official figures.

The Office for National Statistics (ONS) estimated that gross domestic product (GDP) fell by 0.3% in the fourth quarter, following a decline of 0.1% in the previous three months.

It means that the economy entered a technical recession, as defined by two or more quarters in a row of falling GDP.

It marks the first time the UK has entered recession since the first half of 2020, when the initial Covid-19 lockdown sent the economy plunging into reverse.

The figures deal a blow to Prime Minister Rishi Sunak, who has promised to grow the economy as one of his five priorities.

Liz McKeown, ONS director of economic statistics, said: “Our initial estimate shows the UK economy contracted in the fourth quarter of 2023.

“While it has now shrunk for two consecutive quarters, across 2023 as a whole the economy has been broadly flat.

“All the main sectors fell on the quarter, with manufacturing, construction and wholesale being the biggest drags on growth.”

Chancellor Jeremy Hunt said low economic growth is “not a surprise”, but added that the UK must “stick to the plan – cutting taxes on work and business to build a stronger economy” despite tough times for many families.

Responding to the news the UK has entered a recession, the shadow chancellor Rachel Reeves said: “Rishi Sunak’s promise to grow the economy is now in tatters.

“The Prime Minister can no longer credibly claim that his plan is working or that he has turned the corner on more than 14 years of economic decline under the Conservatives that has left Britain worse off.”

Published: 15/02/2024 by Radio NewsHub