United Kingdom’s Economy Enters Recession

The United Kingdom’s economy has entered a recession as its gross domestic product (GDP) fell by 0.3 percent in December 2023, Aso Naija Reports.

According to the UK’s Office For National Statistics (ONS), the fall in GDP was due to a decline in all main sectors of the economy.

This is the “mildest recession” witnessed in 50 years — unlike the huge drop of over 1 percent sometimes seen, according to BBC.

The ONS said the real GDP fell 0.3 percent in the fourth quarter (Q4) of 2023.

The agency said hard-pressed households cut back on spending in response to soaring interest rates and rising living costs.

The UK GDP was estimated to have increased by 0.1 percent for the full year in 2023, following a growth of 4.3 percent in 2022.

According to ONS, this is the weakest annual change in real GDP since the financial crisis in 2009, excluding the year 2020, which was affected by the coronavirus (COVID-19) pandemic.

“The gross domestic product (GDP) is estimated to have fallen by 0.3% in Quarter 4 (Oct to Dec) 2023, following an unrevised fall of 0.1% in the previous quarter,” the UK statistics agency said.

While the economy has now decreased for two consecutive quarters and entered recession, across 2023, GDP is estimated to have increased by 0.1% compared with 2022.

“In output terms in Quarter 4 2023, there were falls in all three main sectors in the latest quarter with declines of 0.2% in services, 1.0% in production, and 1.3% in construction output.

In expenditure terms, there was a fall in the volume of net trade, household spending and government consumption in Quarter 4 2023, partially offset by an increase in gross capital formation.”

The ONS noted that all main sectors shrank in the fourth quarter — with manufacturing, construction and wholesale being the biggest drags on growth — but added the economy was broadly flat overall in 2023.