UK Economy Enters Recession, GDP Drops By 0.3%

UK economy has entered recession after recording two successive quarters of negative economic growth in the second half of last year, official data showed on Thursday.

Gross domestic product shrank by 0.3 per cent in the fourth quarter of 2023 after contracting 0.1 per cent in the previous three months, the Office for National Statistics said in a statement, meeting the technical definition of a recession.

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Britain slid into recession last year on elevated inflation and a cost-of-living crisis, official data showed Thursday, dealing a blow to Prime Minister Rishi Sunak before this year’s general election.

Gross domestic product shrank 0.3 per cent in the fourth quarter of 2023 after contracting 0.1 per cent in the prior three months, the Office for National Statistics (ONS) said in a statement.

That places the economy in recession, which is defined as two successive quarters of falling GDP.

The ONS noted that all main sectors shrank in the fourth quarter – with manufacturing, construction and wholesale being the biggest drags on growth – but added the economy was broadly flat overall in 2023.

Sunak, whose governing Conservatives are trailing Keir Starmer’s main opposition Labour Party ahead of the election due this year, has pledged to grow the economy as one of his top five priorities.

News of the recession comes as voters go to the polls in two by-elections on Thursday, with the Conservatives fearful of losing one-time strongholds in Wellingborough, central England, and Kingswood in the southwest.

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