U.K. Official Data Confirms A Recession As The Economy Contracts For Two Consecutive Quarters In 2023!

Credit: Dim Sum Daily

15th February 2024 – (London) Official data released on Thursday revealed that the British economy has officially entered a recession, following two successive quarters of contraction in the second half of 2023. The Office for National Statistics (ONS) reported that the country’s gross domestic product (GDP) fell by 0.3 per cent in the fourth quarter of 2023, after a 0.1 per cent shrinkage in the third quarter.

Manufacturing, construction, and wholesale trade were the primary contributors to the negative growth, partially offset by increases in the hotel sector and rentals of vehicles and machinery.

For the past two years, the UK has grappled with a stagnating economy and high inflation, leading to a cost-of-living crisis that has burdened households. The summer of 2022 witnessed widespread strikes, and pay disputes have persisted.

Chancellor of the Exchequer, Jeremy Hunt, acknowledged the significant impact of high inflation on economic growth, emphasizing its role as the primary barrier. He further stated that combatting inflation has been a top priority. Hunt also noted that the current high-interest rates, set by the Bank of England to curb inflation, have contributed to the low growth.

The Bank of England has maintained its benchmark interest rate at a nearly 16-year high of 5.25 per cent. In an early February report, the central bank projected gradual economic growth, largely due to a diminishing drag from past rate increases.