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UK economy fell into recession after people cut spending

People spending less, doctors’ strikes and a fall in school attendance dragged the UK into recession at the end of last year, official figures show.

The economy shrunk by a larger than expected 0.3% between October and December, after it had already contracted between July and September.
The UK is in recession if it fails to grow for two successive quarters.

For the whole of 2023, the UK economy grew by 0.1%.

Nevertheless, excluding the Covid years, that annual growth figure is the weakest since 2009 when the UK and other major economies were reeling from the global financial crisis when bank lending almost ground to a halt.

The Office for National Statistics (ONS) said there were a number of areas where economy faltered at the end of the year. Shoppers spent less in December after taking advantage of Black Friday sales in November.

 

Responding to the ONS’ first GDP estimate for the fourth quarter of 2023, Dr Liz Cameron CBE, Chief Executive of the Scottish Chambers of Commerce, said:

“A contraction in GDP for the final quarter of 2023 means the UK economy is in technical recession. Businesses were already clear about the challenges that they face, and this news should ring alarm bells for Government.

“While this recessionary data is slight, it confirms what our own business research had been saying for all of 2023. That the economy remained persistently locked in a low growth cycle of stagnation as headwinds continued to weigh heavily on firms.

“The Chancellor must use the upcoming Spring Budget in just a few weeks to set out his government’s plans to help business and the economy to grow.

“Businesses need long-term certainty through an economic plan that relieves their cost pressures and helps unlock much needed investment.”

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