The United Kingdom has officially slipped into recession as the nation anticipates parliamentary elections later this year.
This doesn't exactly come as a surprise, especially with inflation spotted earlier this year in the country.
The Office for National Statistics (ONS) released official figures on 15th February which show that the nation’s gross domestic product (GDP) shrank by 0.3% during the last quarter of 2023 (October-December). It had already contracted by 0.1% during the preceding, i.e. third, quarter of 2023 (July-September).
In the UK, a contraction in GDP for two successive quarters is defined as recession.
Therefore, the UK has officially slipped into recession now.
Liz McKeown, Director of Economic Statistics, ONS, said, “While it has now shrunk for two consecutive quarters, across 2023 as a whole the economy has been broadly flat.”
The UK GDP increased by a mere 0.1% in 2023.
McKeown added, “All the main sectors fell on the quarter, with manufacturing, construction and wholesale being the biggest drags on growth, partially offset by increases in hotels and rentals of vehicles and machinery.”
In Q4 2023,
Source: Twitter/ONS
Across 2023 as a whole,
In fact, even real household expenditure contracted by 0.1% in October-December 2023. The largest contributions to the fall were from lower spending on recreation and culture, miscellaneous goods and services, and transport.
If we don’t include the global recession caused by the Coronavirus, the Q4 2023 performance of the UK economy is its worst since 2009 when it was still under the adverse effect of the 2007-08 global financial crisis.
Source: Twitter/ONS
Both the previous crises were rather exceptional in that they affected the entire world and couldn’t be tamed by a national government.
The UK will announce its annual budget next month, putting the Conservative government led by Prime Minister Rishi Sunak on a spot. The government needs to address the ongoing economic hardships while attracting voters to the Party.
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