LONDON (AP) — The British economy entered recession at the end of 2023 for the first time since the start of the coronavirus pandemic, as output contracted more than expected in the final quarter of the year, officials showed Thursday.
In a blow to the ruling Conservative Party ahead of this year's general election, the Office for National Statistics estimated that economic activity, measured by gross domestic product, fell by 0.3% in the final quarter of the year compared to the fourth quarter of the previous year. A period of one month. He pointed out that the three main sectors – services, industrial production and construction – declined.
This was much more than the 0.1% decline that economists had expected.
The quarterly decline followed a 0.1% decline in the previous three-month period, highlighting how the economy has been hurt by higher interest rates that were raised in order to reduce inflation.
A recession is officially defined as two consecutive quarters of economic decline.
This is the first time the UK economy has fallen into recession since the first half of 2020, when production collapsed during the country's first coronavirus lockdown.
A recession – no matter how modest – is not the ideal context for Prime Minister Rishi Sunak as he considers when to call an election. Opinion polls show that his Conservative Party lags far behind the main opposition Labor Party.
Chancellor of the Exchequer Jeremy Hunt blamed rising inflation for the weak economy, which affected living standards.
“The low growth is not surprising,” he added. “While times remain difficult for many families, we must stick to the plan of cutting taxes on jobs and businesses to build a stronger economy.”
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