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LONDON: Britain sank into recession on the finish of final yr on excessive inflation and a cost-of-living disaster, dealing a blow to Prime Minister Rishi Sunak earlier than this yr’s election.
Gross home product shrank 0.3 per cent within the fourth quarter of 2023 after contracting 0.1 per cent within the prior three months, the Workplace for Nationwide Statistics (ONS) mentioned in a press release.
That locations the economic system in recession, which is outlined as two successive quarters of falling GDP.
The information delivers a serious blow to Sunak, who has vowed to develop the economic system as one in all his high 5 priorities.
His governing Conservatives are presently trailing Keir Starmer’s primary opposition Labour Get together forward of a common election.
It additionally marks the UK’s first recession because the first half of 2020, when the economic system was slammed by fallout from the COVID-19 pandemic.
“Our preliminary estimate reveals the UK economic system contracted within the fourth quarter of 2023,” mentioned ONS director of financial statistics Liz McKeown.
“Whereas it has now shrunk for 2 consecutive quarters, throughout 2023 as a complete the economic system has been broadly flat.
“All the primary sectors fell on the quarter, with manufacturing, building and wholesale being the most important drags on development.”
In response to the info, Finance Minister Jeremy Hunt added that “excessive inflation is the one largest barrier to development”.
The recession information knowledge comes in the future after separate official knowledge confirmed that UK inflation held at 4.0 per cent in January from December, or double the Financial institution of England’s goal price.
Britain’s economic system has been stagnating for practically two years, although recessions within the nation have change into more and more uncommon because the economic system grows bigger and extra mature.
The COVID-19 pandemic triggered the deepest contraction on document over two quarters in early 2020. Earlier than that the worldwide monetary disaster sparked a extreme recession that lasted simply over a yr, from the second quarter of 2008 by means of to the second quarter of 2009.
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