UK Economy Slipped Into Recession In Second Half Of 2023 (image @Pixabay)
United Kingdom has fell into recession at the end of 2023, as cost-of-living has started to weigh heavily on productivity and consumer spending of the country. Britain’s Office for National Statistics said that the country’s gross domestic product (GDP) has gone down by 0.3 percentage during the final three months of 2023. The collapse of retail sales in a run-up to Christmas was also a factor that contributed to the fall.
The official confirmation of the recession came like a hard blow to the government, as election is in less than a year away. The recession will have an embarrassing effect on Prime Minister Rishi Sunak as he promised economic growth as one of his five priorities of the government at the beginning of last year.
As per the data from Office of National Statistics (ONS), 2023 in whole, which was estimated at 0.1 percentage, is marked as the weakest year since 2009 during the country’s financial crisis, excluding 2020 economic collapse dur to Covid 19.
Liz McKeown, the director of the economic statistics at ONS said that UK’s economy shrunk in the last quarter of 2023. He said as the economy has shrunk for two consecutive quarters, the 2023 in whole has been broadly flat.
He said, “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”.
Economists has expected a shallow recession at the end of last year as households came under pressure from higher borrowing costs and rising prices for the daily essentials, forcing the cutbacks everywhere else.
Andrew Bailey, governor of Bank of England, has downplayed the significance of the quarterly GDP figures. He said that there were signs of an “upturn” in the economy that would be clarified in the months ahead.
The chief economist at ADM Services International, Marc Ostwald, said that the UK economy may continue to “flirt” with recession for most of this year. He added, “rates will remain high, even if there are a few cuts later in the year, with little or no fiscal room, and trade with Europe likely to suffer as economies there face a similar outlook”.
