UK economy officially went into recession in 2023, ONS confirms

Official figures released by the Office for National Statistics (ONS) have confirmed that the U.K. economy entered a recession by the end of last year.

The latest estimate indicates a contraction in the last two quarters of 2023.

The ONS announced that the gross domestic product (GDP) of the U.K. had shrunk by 0.3% in the final quarter of the year, remaining unchanged from an earlier estimate.

This decline followed a 0.1% contraction in the third quarter of 2023, confirming a technical recession characterized by two consecutive quarters of negative growth.

Although some previous recessions have been revised downward, the ONS has affirmed the recessionary trend in this instance. Notably, the "double-dip" recession initially recorded in 2011 was eventually debunked during George Osborne's tenure as Chancellor.

As the government faces pressure due to the economic downturn, Chancellor Rishi Sunak, amid preparations for an upcoming general election, has been endeavoring to reassure Conservative MPs about the improving economic situation.

This comes after business surveys indicated a recovery in private sector activity at the beginning of the year.

Despite these setbacks, there are signs of a potential turnaround in the early months of 2024. GDP saw a modest growth of 0.2% in January compared to December, and unofficial surveys suggest that growth continued in February and March.

Yet, the U.K. has been grappling with a slow recovery from the impact of the COVID-19 pandemic. Presently, its economy is only 1% larger than it was in late 2019, with Germany being the only G-7 nation to fare worse.

Looking ahead, the Bank of England anticipates minimal growth of just 0.25% for the U.K. economy this year. Conversely, official budget forecasters are more optimistic, expecting an expansion of 0.8%.

Source: Newsroom