The UK economic system has formally entered recession, figures present.
A recession is outlined as two consecutive three-month durations the place the economic system contracts slightly than grows.
A serious measure of financial development, gross home product (GDP) shrank 0.3% between October and December, the most recent Office for National Statistics (ONS) information reveals.
It’s a steeper fall than anticipated by economists who had forecast a 0.1% contraction.
It adopted 0.1% of destructive financial development within the three months from July to September.
The information, nonetheless, is simply an estimate and is topic to revision.
Figures are routinely revised as extra data turns into obtainable.
While earlier recessions, resembling in the course of the world monetary crash of 2008 and 2009, have been lengthy lasting this one is prone to be gentle and brief lived.
Consumer spending energy has been eroded by the price of dwelling disaster with excessive inflation and costly vitality payments consuming into disposable revenue.
Stormy climate additionally has stored customers at dwelling and restricted manufacturing output.
Rainfall was far above common ranges for the ultimate three months of 2023 with increased wind speeds affecting quite a few sectors of the economic system together with development and retail gross sales.
The UK economic system struggled with productiveness, notably rising from the COVID-19 pandemic. The variety of long-term sick and folks neither working nor in search of work hit all time highs because the virus receded and lockdowns disappeared.
Strikes too have held again productiveness as non-public and public sector staff throughout industries staged walkouts all through 2023.
In response to the info, Chancellor Jeremy Hunt mentioned: “High inflation is the single biggest barrier to growth which is why halving it has been our top priority. While interest rates are high – so the Bank of England can bring inflation down – low growth is not a surprise.
“But there are indicators the British economic system is popping a nook; forecasters agree that development will strengthen over the following few years, wages are rising quicker than costs, mortgage charges are down and unemployment stays low. Although instances are nonetheless robust for a lot of households, we should follow the plan – slicing taxes on work and enterprise to construct a stronger economic system.”
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Source: information.sky.com”