The UK fell into recession in the second half of last year as high interest rates and inflation put pressure on household and business finances, making it difficult for the ruling Conservatives to cope with the year electoral.
Britain’s gross domestic product (GDP) fell 0.3% in the fourth quarter of last year, after falling 0.1% in the third, according to figures released by the Office for National Statistics on Thursday. Two quarters of economic contraction in a row are generally considered by economists to be the definition of a so-called “technical” recession.
Over the entire year 2023, the United Kingdom, however, still shows slight growth of 0.1% year-on-year, after growth of 4.3% in 2022, specifies the ONS. This is the worst performance “since the 2009 financial crisis, except 2020”, when the British economy was paralyzed for months due to the Covid-19 pandemic. “Inflation is the biggest obstacle to growth, which is why dividing it in two has been our priority,” commented Finance Minister Jeremy Hunt.
Inflation in the United Kingdom stands at 4%, still double the Bank of England’s target, but significantly reduced compared to its peak of 11% reached in October 2022. “With high interest rates ” – currently at 5.25% – for the Bank of England to bring down inflation, weak growth is not a surprise,” Mr Hunt continues. “But there are signs that the economy British has passed a milestone and forecasters anticipate growth for the coming years,” he assures.
This article is originally published on rtbf.be
