The UK economy has suffered a significant setback, slipping into a recession at the close of last year amid challenges posed by the cost of living crisis. The Office for National Statistics reported a larger than anticipated 0.3% contraction in gross domestic product (GDP) for the three months ending in December, marking a decline across all major sectors and a sharp drop in retail sales leading up to the holiday season.

 

This downturn, following a 0.1% decline in the previous quarter, officially confirms a second consecutive period of negative economic growth, meeting the technical definition of a recession. The news deals a blow to Prime Minister Rishi Sunak's pledge to stimulate economic recovery, particularly as the country approaches a looming general election.

 

 

The weak economic performance, with GDP expanding by just 0.1% over the entirety of 2023, reflects the most sluggish year since the 2009 financial crisis, excluding the exceptional circumstances of the Covid-19 pandemic in 2020. Notably, economic growth per capita contracted for seven consecutive quarters, highlighting the widespread impact of rising prices and borrowing costs on households.

 

The ONS cited declines in key sectors such as manufacturing, construction, and wholesale trade, partially offset by modest gains in hospitality and vehicle rental. Economists had anticipated a mild recession due to increased financial strain on households and disruptions from strikes and adverse weather conditions.

 

Despite these challenges, recent indicators suggest a potential turnaround in consumer confidence, buoyed by expectations of interest rate reductions by the Bank of England to combat inflation. Chancellor Jeremy Hunt emphasized the importance of tackling inflation to stimulate growth, expressing optimism about future economic prospects.

 

 

The Bank of England's upcoming interest rate cuts, expected as early as this summer, aim to alleviate pressure on the economy after 14 consecutive rate hikes to counter inflationary pressures. While inflation remains at 4%, unchanged from the previous month but down from over 10% a year ago, concerns persist about the economy's resilience.

 

Looking ahead, the Bank's governor, Andrew Bailey, downplayed the significance of the quarterly GDP figures, suggesting signs of improvement in the months ahead. However, uncertainties remain, particularly regarding the impact of ongoing inflation and global economic dynamics on the UK's recovery trajectory.

 

Despite forecasts of modest growth exceeding that of France and Germany, the UK still lags behind other advanced economies. The ONS highlighted weakness across various sectors, including services, reflecting the ongoing challenges posed by the cost of living crisis.

 

In summary, while the recent recession may be relatively shallow, it underscores the persistent economic headwinds facing the UK and the need for decisive measures to support recovery and address underlying structural issues.

 

16.02.24

Source

 

Whiletechnically the UK is in recession, unemployment is very low. Inflation has declined sharply. For most people those two issues are far more important than GDP growth.

Nothing would make me happier than seeing Sunak humiliated and sacked.

1 hour ago, thaibeachlovers said:

Nothing would make me happier than seeing Sunak humiliated and sacked.

Your opposition to Sunak will certainly make some voters think twice... about voting for the opposition.

1 hour ago, thaibeachlovers said:

Nothing would make me happier than seeing Sunak humiliated and sacked.

In politics as in government, individuals come and go. Problems remain - addressed, unaddressed, solved, insoluble.

2 hours ago, placeholder said:

Whiletechnically the UK is in recession, unemployment is very low. Inflation has declined sharply. For most people those two issues are far more important than GDP growth.

 

GDP should be presented as GDP per capita and not as a total number to truly reflect the sate of the economy. For any Brits in business, they have likely been aware that the UK has been in recession, albeit it not technically, for the last two years. Look at the business closures and low levels of demand. Job losses in the news every day too.

 

The "unemployment" figures are misleading and manipulated as to what makes an "unemployment" claim. Those who were recently self-employed cannot claim unemployment welfare benefit payments so don't show on the figures. The true state is hidden in the "economically inactive" numbers of 21.9%. If only 75% of 16-64yr olds are employed, then what about the other 25%? That 25% are not paying income taxes or national insurance contributions either and are likely claiming other welfare benefits such as Universal Credit, Housing Allowance etc.  

Source ONS

 

22 minutes ago, soi3eddie said:

 

The true state is hidden in the "economically inactive" numbers of 21.9%. If only 75% of 16-64yr olds are employed, then what about the other 25%?

 

 

After covid finished, my sister and bro-in-law retired, both early 50's.

I think a lot of people decided to make changes. I sold up and left UK.

7 minutes ago, noobexpat said:

After covid finished, my sister and bro-in-law retired, both early 50's.

I think a lot of people decided to make changes. I sold up and left UK.

 

I know many who retired early and moved here to Thailand. My plan too in next 3-4 years.

 

I just looked at the labour market figures from February 2020 before Covid took hold and lockdowns started. The unemployment figure is identical at 3.8%. The employent rate figure was 1.5% higher, whilst the inactivity rate was 1.4% lower than today. 

 

So to summarise...

Q1: ÷0.2

Q2: 0

Q3; - 0.1

Q4: -0.3

Year: + 0.1?

Ahem....

2 hours ago, placeholder said:

Your opposition to Sunak will certainly make some voters think twice... about voting for the opposition.

Ah gotcha!

Your first post had me thinking that you were a Tory apologist.

This confirms it.

It's gonna be lonely being a Tory in the coming months.

"Fellow Conservatives, go back to your constituencies and prepare for Opposition".

Ahha,Brexit coming home to roost?

39 minutes ago, Red Forever said:

Ah gotcha!

Your first post had me thinking that you were a Tory apologist.

This confirms it.

It's gonna be lonely being a Tory in the coming months.

"Fellow Conservatives, go back to your constituencies and prepare for Opposition".

It seems you did not get the sarcasm in his post.

I personally don't blame the Conservatives for this. Once Brexit passed, disruptions to the British economy were inevitable.

 

The Conservatives had the bad luck of being in power at the wrong time.

 

If Labor can't turn the economy around, they will be gone soon.

1 hour ago, Danderman123 said:

I personally don't blame the Conservatives for this. Once Brexit passed, disruptions to the British economy were inevitable.

 

The Conservatives had the bad luck of being in power at the wrong time.

 

If Labor can't turn the economy around, they will be gone soon.

 

I agree 100% that "Once Brexit passed, disruptions to the British economy were inevitable".

 

However, I don't see how you can possibly absolve the Tories from blame. Look at the evidence: Cameron, Tory PM, called an unnecessary referendum for purely selfish reasons.  Nearly half of all Tory MPs campaigned in favour of Brexit. Cameron's replacement, May, ensured that there would be a 'hard' Brexit by effectively ruling out joining the EEA and any continuation of either the Customs Union and membership of the Single Market early in the negotiations ("Brexit means Brexit"). Her replacement, Johnson, made a bad situation worse by continually insulting and antagonising the EU. To give Sunak deserved credit, he has, at least attempted to rebuild our relationship with the EU, and he has had some success. Nevertheless, imo there are plenty of reasons to blame successive Tory governments for the fiasco that is Brexit.

Where are those guys who always claim that the economy in the UK is doing better than the EU?

11 hours ago, thaibeachlovers said:

Nothing would make me happier than seeing Sunak humiliated and sacked.

The Conservatives are pretty much dead in the water after the last few years of screwing up everything they have touched.  Two by-elections on Thursday in what should have been safe Conservative seats and Labour wiped the floor with them.  But be clear people were not voting Labour in, they are voting to get rid of this shower of inadequate imbeciles.  

 

 

Corbyn & abbott would have saved the day 555

4 hours ago, BenStark said:

Where are those guys who always claim that the economy in the UK is doing better than the EU?

It's doing better than some countries in the EU.

5 hours ago, BenStark said:

Where are those guys who always claim that the economy in the UK is doing better than the EU?

 

   Still here , can I help you ?

4 hours ago, noobexpat said:

Corbyn & abbott would have saved the day 555

Breaks glass on ‘Corbyn & Abbott’ emergency argument push button.

 

 

7 hours ago, Danderman123 said:

I personally don't blame the Conservatives for this. Once Brexit passed, disruptions to the British economy were inevitable.

 

The Conservatives had the bad luck of being in power at the wrong time.

 

If Labor can't turn the economy around, they will be gone soon.

Nothing at all inevitable.

 

The Tories chose the hardest Brexit they could get away with.

 

Tory Brexit, Tory consequences.

 

 

Corbyn & abbott. Never forget the alternative.

 

22 hours ago, placeholder said:

Whiletechnically the UK is in recession, unemployment is very low. Inflation has declined sharply. For most people those two issues are far more important than GDP growth.

Inflation has declined sharply (exactly as predicted by economists) because the Bank of England raised interest rates and kept them high.

 

The Bank of England is independent of the government and have been criticised by that same government recently, for keeping the rate high, so its another bogus claim  that Sunak & co have reduced inflation themselves.

5 hours ago, Chomper Higgot said:

Breaks glass on ‘Corbyn & Abbott’ emergency argument push button.

 

 

 

That should be ‘Corbyn & Abbott’ emergency argument push but... but... but...ton.

Terrifying...

25 minutes ago, noobexpat said:

Terrifying...

 

Err ... Corbyn is no longer leader of the Labour Party and Diane Abbott has had the Labour whip removed so there is next to no chance of either eventuality.

1 minute ago, RayC said:

 

Err ... Corbyn is no longer leader of the Labour Party and Diane Abbott has had the Labour whip removed so there is next to no chance of either eventuality.

 

And thank god, says the whole nation.

Got no issues with starmer and the current labour gang. I don't hate, just because ...like so many do.

 

Almost impossible job whoever runs the country. Try their best is all i expect!

22 hours ago, candide said:

So to summarise...

Q1: ÷0.2

Q2: 0

Q3; - 0.1

Q4: -0.3

Year: + 0.1?

Ahem....

 

I'm not sure what point you're trying to make...

 

Are you disagreeing with the definition of "recession"? Or are you claiming that, despite being in recession, the UK should be proud of having an economy which has "grown" at the mammoth rate of 0.1%?

6 minutes ago, JayClay said:

 

I'm not sure what point you're trying to make...

 

Are you disagreeing with the definition of "recession"? Or are you claiming that, despite being in recession, the UK should be proud of having an economy which has "grown" at the mammoth rate of 0.1%?

 

Its basically flat ...but the word recession sells news

 

No reaction from the stockmarket which i think tells a story ie. largely expected, rather than a big surprise.