La Jornada – The British economy entered recession at the end of 2023

London. The UK economy contracted in the fourth quarter of 2023 for the second time in a row, meaning the country has entered a recession, the Office for National Statistics (ONS) noted on Thursday.

Britain’s gross domestic product fell by 0.3 percent in the fourth quarter of last year, after falling by 0.1 percent in the third quarter, according to a statement from the Office for National Statistics.

High interest rates and inflation have put pressure on the economy of households and businesses, which in the middle of an election year complicates the Conservatives’ mission to power.

Economists often consider two consecutive quarters of economic contraction to be the definition of a “technical” recession.

However, in 2023 as a whole, the UK continues to show slight growth of 0.1 per cent year-on-year, after growth of 4.3 in 2022, the Office for National Statistics said.

The main reason for the recession was weak business results in December, in the middle of the Christmas season which is traditionally the busiest time of year for the sector, according to the Office for National Statistics.

In this way, the British economy enters a recession for the first time since 2020, when general isolation measures to combat the coronavirus pandemic affected economic activity for several months.

The Office for National Statistics indicates that the British economy “is recording its worst performance since the 2009 crisis, with the exception of 2020.”

Treasurer Jeremy Hunt said: “Inflation is the biggest obstacle to growth, so halving it was our priority.”

UK inflation is at 4%, double the target set by the Bank of England, but down from 11% reached in October 2022.

See also  AMLO meets with businessmen from the Mexican Business Council

“With interest rates so high – currently 5.25 percent – for the Bank of England to reduce inflation, weak growth is not surprising,” Hunt continued.

The minister said, “But there are indications that the British economy has passed a difficult stage, and expectations speak of growth in the coming years.”

Economists underestimate the extent of this recession.

“It is moderate and leading indicators indicate that it is already coming to an end,” economist Ruth Gregory of Capital Economics said in a statement.

But Gregory explained that “announcing that the United Kingdom will enter a technical recession in 2023 would be a blow to Conservative Prime Minister Rishi Sunak.”

The Labor Party currently enjoys a clear lead in opinion polls over the Conservative Party, which has ruled the country for about 14 years, before this year’s elections, for which a date has not yet been set.

Leave a Reply

Your email address will not be published. Required fields are marked *