Yahoo Finance UK GDP falls by 0.3% as official data confirms recession in 2023
It has been confirmed that the UK economy went into recession at the end of last year. The Office for National Statistics (ONS) says that GDP shrank by 0.3% in the last three months of the year.
It followed contraction of 0.1% in the third quarter of 2023, confirming a technical recession – two consecutive quarters of negative growth.
The data confirmed the UK's economy entered a recession in the second half of last year. News of a recession in 2023 came out in February, but the figures were subject to revision by the ONS. The statistical body has now confirmed there were two consecutive quarters in which the economy shrank.
A recession is commonly defined as when the economy fails to grows over two consecutive quarters, or three month periods.
Read more: What is a technical recession and what does it mean for me?
ONS director of Economic Statistics Liz McKeown said: “Our updated set of GDP figures shows quarterly growth unrevised across 2023, with a little growth in the first quarter and small contractions in the latter half of the year.
“New figures on households show that savings remained high, with an increase in income in the last quarter of the year.
“Our underlying balance of payments deficit with the rest of the world widened at the end of 2023, partly because the trade picture worsened slightly.”
For the whole of 2023, the UK economy grew by just 0.1%. Excluding the COVID pandemic, that is the country's weakest economic result since the 2009 financial crisis.
Read more: UK house prices average discount drops to £10,000
Chancellor Jeremy Hunt said: “Last year was tough as interest rates had to rise to bring down inflation, but we can see our plan is working. Inflation has fallen decisively from over 11% to 3.4%, the economy grew in January and real wages have increased for eight months in a row.
"Our cuts to National Insurance will boost growth by rewarding work and putting over £900 a year back into the average earner’s pocket.”
The most recent numbers for January show that the UK economy picked up, raising hopes it could be on its way out of recession.
The economy grew by 0.2%, official figures show, boosted by sales in shops and online and more construction activity. This is an early estimate, but signals how the UK is faring.
Watch: UK economy returns to growth in January after dipping into recession
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