The UK economy fell into a recession in the second half of 2023, with GDP contractions of 0.3% from October to December and 0.1% between July and September.
London: Economy of the United Kingdom under the leadership of Prime Minster Rishi Sunak fell into a recession in the second half of 2023, ahead of an election expected later this year, reported Reuters on Thursday. GDP of the country contracted by 0.3 percent from October to December, and 0.1 percent between July and September, which is being considered worse than expected.
Reaction Of UK’s Finance Minister
Finance Minister of the United Kingdom, 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 the reports of Reuters, Jeremy Hunt was planning 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 growth rate of economy was just 0.1 percent across 2023 compared to 2022, stated the Office of National Statistics (ONS). The Bank of England (BoE) has said it expects output to pick up slightly in 2024 but only to 0.25 per cent growth.
Why Is UK In Recession?
Although recessions have been less often in Britain as the country’s economy has grown larger and more developed, the country’s economy has been in a state of recession for the past two years. Early in 2020, the COVID-19 epidemic caused the longest contraction on record to last for two quarters. Prior to that, from the second quarter of 2008 to the second quarter of 2009, a severe recession brought on by the global financial crisis lasted for just over a year.
The fourth-quarter GDP decline was the largest since the British government’s implementation of new COVID-19 limitations during the first three months of 2021.In other news, Japan’s economy also unexpectedly shrank, sending the nation into a recession and losing its ranking as the third largest economy in the world to Germany.
The Cabinet Office said on Thursday that the gross domestic product shrank in the last three months of 2023 at an annualized pace of 0.4%, following a contraction in the previous quarter.
(With inputs from agencies)