It was confirmed that the UK economy fell into recession at the end of last year. The Office for National Statistics (ONS) announced that GDP contracted by 0.3% in the last three months of this year.
The third quarter of 2023 also saw negative growth of 0.1%, confirming a technical recession and marking the second consecutive quarter of negative growth.
The data confirmed that the UK economy entered recession in the second half of last year. News came out in February that the economy would enter recession in 2023, but the figures were subject to revision by the ONS. The statistical agency has confirmed that the economy has contracted for the second consecutive quarter.
A recession is generally defined as when the economy does not grow for two quarters or three consecutive months.
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Liz McCune, Head of Economics and Statistics at the ONS, said: “The latest GDP figures show unrevised quarterly growth rates for the whole of 2023, with slight growth in the first quarter and slight contraction in the second half. “It’s happening,” he said.
“New statistics on household finances show that incomes rose in the last quarter of this year and that savings remain high.
“Our primary balance of payments deficit with the rest of the world widened at the end of 2023, partly due to a slight deterioration in the trade situation.”
For all of 2023, the UK economy grew by just 0.1%. Excluding the coronavirus pandemic, this is the weakest economic performance since the 2009 financial crisis.
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Treasurer Jeremy Hunt said: “Last year was a tough year as we had to raise interest rates to rein in inflation, but we can see that our plans are working.” Inflation fell decisively from over 11% to 3.4%, the economy grew in January, and real wages rose for the eighth consecutive month.
“Cutting National Insurance will boost growth by making work more rewarding and putting more than £900 a year back in the pockets of average earners.”
The latest figures for January show the UK economy is improving, raising hopes that it is emerging from recession.
Official figures showed economic growth was 0.2%, driven by increased sales in stores and online and construction activity. This is an early estimate, but it is indicative of the situation in the UK.
Video: UK economy returns to growth in January after falling into recession
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