{"id":17726,"date":"2024-02-15T12:09:10","date_gmt":"2024-02-15T12:09:10","guid":{"rendered":"https:\/\/theblogonline.com\/?p=17726"},"modified":"2024-02-15T12:36:06","modified_gmt":"2024-02-15T12:36:06","slug":"17726","status":"publish","type":"post","link":"https:\/\/theblogonline.com\/?p=17726","title":{"rendered":"UK Economy Slides Into Recession"},"content":{"rendered":"

London CNN \u00a0\u2014\u00a0The United Kingdom has slipped into recession<\/span><\/a> just months ahead of a general election, official figures showed Thursday, derailing Prime Minister Rishi Sunak\u2019s pledge to generate economic growth.<\/span><\/p>\n

Gross domestic product fell 0.3% in the final three months of 2023, following a 0.1% contraction in the July-to-September period, the Office for National Statistics said<\/span><\/a>. A recession is commonly defined as two consecutive quarters of contraction.<\/span><\/p>\n

\u201cAll 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,\u201d ONS director of economic statistics Liz McKeown said in a statement.<\/span><\/p>\n

The ONS estimates that UK GDP increased by a meagre 0.1% in 2023. That\u2019s the worst performance since 2009 when the economy was still reeling from the global financial crisis, if 2020, which was affected by the pandemic, is excluded. Last year\u2019s weak rise in output follows growth of 4.3% in 2022.<\/span><\/p>\n

\u201cAcross 2023 as a whole the economy has been broadly flat,\u201d McKeown said.<\/span><\/p>\n

The news will come as a disappointment to Sunak, whose ruling Conservative Party is contesting two local elections in England on Thursday. It could also widen the already commanding lead the opposition Labour Party enjoys in opinion polls ahead of the national election<\/span><\/a> expected this year.<\/span><\/p>\n

\u201cThough the shallowness of this recession provides comfort, these figures also confirm\u00a0that our economy remained locked in a cycle of persistent stagnation throughout 2023,\u201d said Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales.<\/span><\/p>\n

View this interactive content on CNN.com<\/a><\/span><\/p>\n

The data also provides an unwelcome backdrop for the government\u2019s annual budget announcement next month. UK finance minister Jeremy Hunt is widely expected to unveil moderate cuts to some taxes, despite the anaemic economy and sky-high government debt levels<\/span><\/a>.<\/span><\/p>\n

Hunt said Thursday that low growth was to be expected due to high interest rates, which the Bank of England has taken to levels not seen in 26 years in order to tackle inflation.<\/span><\/p>\n

\u201cBut there are signs the British economy is turning a corner\u2026 Although times are still tough for many families, we must stick to the plan \u2014 cutting taxes on work and business to build a stronger economy,\u201d Hunt added in a statement.<\/span><\/p>\n

Recession label \u2018overly dramatic\u2019<\/span><\/p>\n

Notwithstanding the mild recession, the UK economy has fared much better than many economists feared a year ago, when several were predicting a considerably sharper downturn.<\/span><\/p>\n

\u201cIt\u2019s overly dramatic to label the decline in economic activity in the second half of 2023 a recession, given that employment continued to rise, real wages rebounded and measures of business and consumer confidence returned to levels consistent with rising activity by the end of the year,\u201d said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.<\/span><\/p>\n

Slowing inflation and cuts to interest rates expected later this year could also boost economic activity, which is already picking up in the dominant services sector.<\/span><\/p>\n

Annual UK inflation was unchanged in January at 4%. That\u2019s still double the Bank of England\u2019s 2% target but much lower than the record high of 11.1% hit in October 2022.<\/span><\/p>\n

Food inflation fell to 7% from a recent high of 19.2% in March 2023, the ONS said Wednesday. Compared with the previous month, food prices posted their first decline in more than two years.<\/span><\/p>\n

Meanwhile, salaries have now grown faster than prices for seven consecutive months. Average wages excluding bonuses grew at an annual rate of 6.2% in the three months to December, according to the ONS.<\/span><\/p>\n

\u201cWe think this is the end of the UK recession, and growth will\u00a0stagger into positive territory but only slowly,\u201d economists at Nomura wrote in a note Thursday.<\/span><\/p>\n

The view that the recovery will be uninspiring is supported by separate data<\/span><\/a> from the ONS Thursday showing that growth in productivity, measured as output per hour, flatlined last year.<\/span><\/p>\n

This story has been updated with additional details.<\/span><\/p>\n

View on CNN<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

The United Kingdom has slipped into recession just months ahead of a general election, official figures showed Thursday, derailing Prime Minister Rishi Sunak\u2019s pledge to generate economic growth.<\/p>\n","protected":false},"author":1,"featured_media":17728,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[2424,89,8453],"class_list":["post-17726","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-recession","tag-uk","tag-uk-economy"],"_links":{"self":[{"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/posts\/17726"}],"collection":[{"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17726"}],"version-history":[{"count":4,"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/posts\/17726\/revisions"}],"predecessor-version":[{"id":17731,"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/posts\/17726\/revisions\/17731"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/media\/17728"}],"wp:attachment":[{"href":"https:\/\/theblogonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}