UK fell into recession at the end of 2023

The UK entered into “technical recession” at the end of 2023 after new figures from the Office of National Statistics (ONS) showed that GDP fell by 0.1% in December and by 0.3% during the final quarter of 2023.

The criteria for recession is two consecutive quarters of negative growth.  The final quarter figures followed a contraction of 0.1% in the three months from July to September.

The news will come as a hammer blow to Prime Minister Rishi Sunak. One of his fabled “five promises” was to grow the economy in 2023 – this morning’s figures showed he has failed.

Construction and production output fell by 1.3% and 1% during the October – December period, while services also dropped by 0.2%.

Liz McKeown, director of statistics at the ONS, said: “Our initial estimate shows the UK economy contracted in the fourth quarter of 2023. While it has now shrunk for two consecutive quarters across 2023, as a whole the economy has been broadly flat.

“All 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.

“The latest data showed that health and education performed less well than initially estimated in both October and November. Early indications suggest they both contracted in December.”

The figures released today are an estimate and are routinely subject to revision.

Chancellor Jeremy Hunt said in a statement: “High inflation is the single biggest barrier to growth which is why halving it has been our top priority.

“While interest rates are high – so the Bank of England can bring inflation down – low growth is not a surprise.

“Wages are rising faster than prices, mortgage rates are down and unemployment remains low.

“Although times are still tough for many families, we must stick to the plan – cutting taxes on work and business to build a stronger economy.”