Team Blitz India
LONDON: The UK economy fell into recession at the end of last year as a result of falling gross domestic product (GDP), said reports. The official confirmation may pose a challenge for Prime Minister Rishi Sunak-led Government with General Elections expected this year.
The latest data released by the Office for National Statistics (ONS) on February 15 said that real GDP is estimated to have fallen by 0.3 per cent in the three months to December 2023, compared with the three months to September 2023.
It added that on a quarterly basis, this gives two consecutive falls in GDP, with a fall of 0.3 pc in Quarter 4 (Oct to Dec) 2023 following an unrevised fall of 0.1 pc in Quarter 3 (July to Sept) 2023. The monthly GDP is estimated to have fallen by 0.1 pc in December 2023, following a growth of 0.2 pc in November and a fall of 0.5 pc in October.
Service, construction
Services output fell by 0.1 pc in December 2023, and in the three months to December 2023 services output fell by 0.2 pc. Production output grew by 0.6 pc in December 2023, but in the three months to December 2023 production output fell by 1.0 per cent. Construction output fell by 0.5 pc in December 2023, and in the three months to December 2023 construction output fell by 1.3 per cent. GDP measures the value of goods and services produced in the UK. It estimates the size of and growth in the economy.
The data suggested that the fall was more than what was being expected. Economists had forecast a 0.1 per cent contraction, said reports. Incidentally, the data is an estimate and may be subjected to revision.
According to The Guardian newspaper more recent snapshots from the economy have shown a rebound in consumer confidence since the start of this year, buoyed by the prospect of interest rate cuts from the Bank of England as inflationary pressures cool. The Independent newspaper said that the recession comes after households and businesses were battered by ongoing cost pressures and a lengthy run of interest rates that took Bank rate to 5.25 pc – the highest level since 2008.
This heaped further cost pain on millions of mortgage borrowers, it added. The UK’s inews quoted Ashley Webb, an economist at Capital Economics, “The good news is that any recession will be tiny and may already be nearing an end.” But it also warned that the current recession comes amid a period of very low growth for the nation.
