The recession that hit Britain’s economy in the second half of 2023 presented a challenging environment for Prime Minister Rishi Sunak, who has pledged to accelerate growth in front of the anticipated 2024 election.
The gross domestic product (GDP) shrank by a worse-than-expected 0.3 percent in the three months leading up to December, according to the Office for National Statistics (ONS). Between July and September, the GDP fell by 0.1 percent.
A more modest decline of 0.1 percent was predicted by analysts surveyed by Reuters for the October–December period.
According to the ONS, the fourth-quarter GDP decline was the largest since the first quarter of 2021.
The economy of Britain has not expanded in almost two years. According to the Bank of England, it should start to increase modestly in 2024.
“The government will undoubtedly be alarmed by this news, as businesses were already aware of the challenges they confront,” stated Alex Veitch, the British Chambers of Commerce’s director of policy and insight.
“The chancellor must use his budget in just under three weeks’ time to set out a clear pathway for firms and the economy to grow.”
According to the Finance Minister, Jeremy Hunt, there are “signs the British economy is turning a corner” and “we must stick to the plan – cutting taxes on work and business to build a stronger economy.”
According to the ONS, economic output decreased by 0.1 percent on a monthly basis in December following a 0.2 percent increase in November. A 0.2 percent decline was predicted by the Reuters poll for December.
Not long after the release of the GDP figures, sterling saw a little decline in value relative to the dollar and the euro.
The manufacturing, construction, and wholesale sectors were the main causes of the GDP decline, according to the ONS.
