London: The UK economy fell into a recession in the second half of 2023, ahead of an election expected later this year, Reuters reported on Thursday.
Gross domestic product (GDP) contracted by a worse-than-expected 0.3 per cent in the three months to December, having shrunk by 0.1 per cent between July and September, Reuters report quoted official data.
A technical recession is often defined as two consecutive quarters of negative growth in the real GDP.
Finance minister Jeremy Hunt said there were “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.”
As per Reuters report, Hunt was seeking to cut billions of pounds from public spending plans to fund pre-election tax cuts in his budget, if penned in by tight finances.
The Office for National Statistics (ONS) said the economy grew 0.1 per cent across 2023 compared with 2022. The Bank of England (BoE) has said it expects output to pick up slightly in 2024 but only to 0.25 per cent growth.
Britain’s economy has been stagnating for nearly two years, though recessions in the country have become increasingly rare as the economy grows larger and more mature.
The COVID-19 pandemic triggered the deepest contraction on record over two quarters in early 2020. Before that the global financial crisis sparked a severe recession that lasted just over a year, from the second quarter of 2008 through to the second quarter of 2009.
The fall in GDP in the fourth quarter was the biggest since the first three months of 2021 when Britain imposed new COVID-19 restrictions.
In another news, Japan’s economy too contracted unexpectedly, pushing the country into recession and causing it to lose its position as the world’s third largest economy to Germany.
Gross domestic product shrank at an annualized pace of 0.4 per cent in the last three months of 2023, the Cabinet Office said on Thursday, after having contracted in the previous quarter.
(With inputs from ANI)
