For the first time since the coronavirus epidemic began, the British economy entered a recession at the end of 2023 as output declined more than expected in the last three months of the year, according to official data released on Thursday.
The Office for National Statistics projected that economic activity, as measured by gross domestic product, decreased by 0.3% in the fourth quarter of the year from the previous three-month period. This is a blow for the ruling Conservative Party ahead of this year’s general election. It claimed that the three primary industries—construction, industrial production, and services—were all in decline.
Laptops 1000That was a lot more than the 0.1% drop that economists had predicted. The quarterly drop underscores how the economy has been hampered by high-interest rates that have been raised to combat inflation, coming after a 0.1% loss in the preceding three months.
Two consecutive quarters of economic downturn are required to legally identify a recession.
Since the first half of 2020, when the nation had its first COVID-19 lockdown, the British economy has not experienced a recession.
Prime Minister Rishi Sunak is considering when to call for elections, and a recession is hardly the best environment in which to do it. According to opinion polls, the main opposition Labour Party is much ahead of the Conservative Party.
Jeremy Hunt, the chief of the Treasury, attributed the economy’s weakness to excessive inflation. He stated, “Low growth is not a surprise.” “We must stick to the plan—cutting taxes on work and business to build a stronger economy—even though times are still hard for many families.”
