The UK economy
contracted in the fourth quarter of 2023
for the second consecutive period, meaning the country has entered recession, the Office for National Statistics (ONS) said on Thursday.
Britain's GDP fell 0.3% in the fourth quarter of last year, after falling 0.1% in the third quarter, according to a statement from the ONS.
High
interest rates and inflation
have put pressure on the economy of households and businesses, which, in the middle of an election year, complicates the task of the conservatives in power.
Two straight quarters of economic contraction are often considered by economists to be the definition of
a "technical" recession.
Rachel Reeves, the Shadow Chancellor of the Exchequer (opposition), during a press conference.
Photo: Bloomberg
However, in 2023 as a whole, the United Kingdom
continues to show slight growth of 0.1% year-on-year
, after growth of 4.3% in 2022, the ONS said.
The recession was caused mainly by
poor business results in December, in the middle of the Christmas season
and traditionally the busiest time of year for this sector, according to the ONS.
In this way, the British economy enters recession
for the first time since 2020
, when confinements to combat the coronavirus pandemic
affected economic activity
for months.
The ONS notes that the British economy "is recording its worst performance since the 2009 crisis, excluding 2020."
The problem of inflation
"Inflation is the biggest obstacle to growth, so halving it has been our priority," said Chancellor of the Exchequer Jeremy Hunt.
Inflation in the United Kingdom
stands at 4%
, still
double the Bank of England's target,
but has fallen from the
11% reached in October 2022.
"With interest rates high - currently 5.25% - for the Bank of England to reduce inflation,
the weak growth is not a surprise
," Hunt continued.
"But there are signs that the British economy has turned a corner and
the forecasts speak of growth for the coming years
," said the minister.
Economists
downplay the scope
of this recession.
"It's moderate"
"It is moderate and leading indicators suggest it is already coming to an end," said economist Ruth Gregory of Capital Economics in a statement.
But Gregory clarified that "the announcement that the United Kingdom has entered a technical recession in 2023 will be a blow to the conservative prime minister," Rishi Sunak.
Labor
currently has a clear lead
in the polls over the Conservatives, in power for about 14 years, ahead of this year's election, which
still has no date.
With information from the Associated press
With information from the Associated Press