Britain slipped into recession late last year due to high inflation and a cost-of-living crisis, dealing a blow to Chancellor Rishi Sunak ahead of this year’s general election.
Gross domestic product (GDP) fell by 0.3% in the fourth quarter of 2023, after falling by 0.1% in the previous three months, the Office for National Statistics (ONS) said in a statement.
This pushed the economy into recession, defined as a decline in GDP for two consecutive quarters.
The news was a major blow to Mr Sunak, who has made economic growth one of his top five priorities.
His Conservative Party currently lags behind Keir Starmer’s main opposition Labor Party ahead of the general election.
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It will also be the UK’s first recession since the first half of 2020, when the economy suffered in the aftermath of the coronavirus pandemic.
Liz McCune, director of economic statistics at the ONS, said: “Our initial forecasts indicate that the UK economy will contract in the fourth quarter of 2023.
“Although it has now contracted for two consecutive quarters, the economy remains roughly flat for 2023 as a whole.
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All major sectors fell in the quarter, with manufacturing, construction and wholesale trade being the biggest drags on growth. ”
Reacting to the data, Treasurer Jeremy Hunt added: “High inflation remains the single biggest barrier to growth.”
The recession news data came a day after separate official data showed UK inflation held at 4.0% in January from December, or twice the Bank of England’s target rate.
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