Britain’s gross home product shrank by 0.3 % within the final three months of 2023, after contracting 0.1 % within the third quarter.
The UK slipped right into a technical recession within the second half of final yr after its financial system registered two consecutive quarters of destructive financial development, official figures have proven.
The Workplace for Nationwide Statistics (ONS) stated in an announcement on Thursday that Britain’s gross home product (GDP) shrank by 0.3 % within the final three months of 2023, after contracting 0.1 % within the third quarter.
A technical recession is often outlined as back-to-back quarters of contracting GDP.
Sterling weakened reasonably in opposition to the US greenback and the euro shortly after the GDP knowledge launch.
The ONS stated the autumn in GDP within the fourth quarter of 2023 was the largest because the first three months of 2021. A Reuters ballot of economists had pointed to a smaller 0.1 % fall within the October-to-December interval.
Financial output dropped by 0.1 % in month-to-month phrases in December, after 0.2 % development in November, the ONS stated. The Reuters ballot had pointed to a 0.2 % fall in December.
Britain’s financial system has been stagnating for practically two years. The Financial institution of England has stated it expects it to choose up barely in 2024, however sluggish development this yr would nonetheless signify a tough backdrop for Prime Minister Rishi Sunak’s makes an attempt to woo voters forward of a nationwide election anticipated later in 2024.
“Businesses were already under no illusion about the difficulties they face, and this news will no doubt ring alarm bells for government,” stated Alex Veitch, director of coverage and perception on the British Chambers of Commerce.
“The chancellor must use his budget in just under three weeks’ time to set out a clear pathway for firms and the economy to grow.”
Finance Minister Jeremy Hunt stated there have been “signs the British economy is turning a corner” and “we must stick to the plan – cutting taxes on work and business to build a stronger economy”.
Media stories stated Hunt was looking for to chop billions of kilos from public spending plans to fund pre-election tax cuts in his March 6 price range, if penned in by tight funds.