The United Kingdom’s (UK) economy has officially entered a recession after recording two successive quarters of negative economic growth in the second half of the previous year, according to official data released on Thursday, News About Nigeria reports.
The Office for National Statistics (ONS) reported a contraction of 0.3% in gross domestic product (GDP) in the fourth quarter of 2023, following a 0.1% contraction in the previous three months, meeting the technical definition of a recession.
The decline was attributed to elevated inflation and a cost-of-living crisis that impacted various sectors of the economy.
The ONS said that all main sectors, including manufacturing, construction, and wholesale, shrank in the fourth quarter, contributing to the negative growth.
However, the ONS also mentioned that the economy was broadly flat overall in 2023.
The recession news comes as a blow to Prime Minister Rishi Sunak and the Conservative Party, which is trailing in the polls ahead of the upcoming general election scheduled for later this year.
Sunak, who has prioritised economic growth, is now facing challenges amid economic headwinds.
Capital Economics analyst Ruth Gregory noted, “This recession is as mild as they come, and timely indicators suggest it is already nearing an end.”
Finance Minister Jeremy Hunt acknowledged the impact of stubborn inflation and high interest rates on the output fall but expressed optimism, stating, “There are signs the British economy is turning a corner.”
The recession announcement coincides with voters participating in two by-elections, with the Conservative Party concerned about potential losses in once-stronghold constituencies.
Despite the challenges, the government said it would stick to its plan, including tax cuts to stimulate economic recovery.
