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  • Writer's pictureBy The Financial District

Recession Hits UK As 2023 Ended

The British economy fell into recession at the end of 2023 for the first time since the onset of the coronavirus pandemic, as output shrank more than anticipated in the final three months of the year, official figures showed, Pan Pylas reported for the Associated Press (AP).

All three main sectors — services, industrial production, and construction — were down.

In what is a blow for the governing Conservative Party ahead of a general election this year, the Office for National Statistics (ONS) estimated that economic activity, as measured by gross domestic product, declined by 0.3% in the fourth quarter of the year from the previous three-month period.

All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

It said all three main sectors — services, industrial production, and construction — were down. That was far more than the 0.1% decline anticipated by economists.

The quarterly decline followed a 0.1% fall in the previous three-month period and highlights how the economy has been hobbled by high interest rates that have been raised to reduce inflation.

Market & economy: Market economist in suit and tie reading reports and analysing charts in the office located in the financial district.

A recession is officially defined as two straight quarters of economic decline. It is the first time the British economy has fallen into recession since the first half of 2020, when output dove during the country’s first COVID-19 lockdown.

Being in a recession is hardly the ideal backdrop for Prime Minister Rishi Sunak as he mulls when to call the election. Opinion polls show that his Conservative Party is heavily trailing the main opposition Labor Party.

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