February 15, (THEWILL) – The UK economy fell into recession in the last quarter of 2023, a report by The Office of National Statistics (ONS), showed on Thursday.
A recession describes a situation of two consecutive three-month periods, where the economy contracts rather than grows.
In its report on Thursday, the ONS said gross domestic product (GDP) fell by a larger than expected 0.3% in the three months to December after a decline in all main sectors of the economy and collapse in retail sales in the run-up to Christmas.
“It followed a drop of 0.1% in the third quarter”, confirming a second consecutive quarter of falling national output; the technical definition of a recession.
The ONS said growth over the course of 2023 as a whole was estimated at 0.1%, the weakest year since 2009 during the financial crisis, excluding the economic collapse in 2020 during the Covid pandemic.
Highlighting a deep economic malaise as households come under pressure from soaraway prices and higher borrowing costs, official figures show economic growth per head of the population shrank for seven consecutive quarters, the worst performance since modern records began in 1955.
The director of economic statistics at the ONS, Liz McKeown, 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, partially offset by increases in hotels and rentals of vehicles and machinery.”
The report is a big blow to Prime Minister Rishi Sunak, having made “growing the economy”, one of his five flagship priorities for government.
Rachel Reeves, the shadow chancellor, said Sunak’s promise was “in tatters” after years of economic stagnation under the Conservatives.
“This is Rishi Sunak’s recession, and the news will be deeply worrying for families and business across Britain”, she said.
