Published On: Thu, Mar 28th, 2024
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GDP falls by 0.3% in Britain but recession shallower than first thought | Personal Finance | Finance

The that the UK entered last year was a little shallower than first thought, revised new figures from the Office for National Statistics have shown.

The economy still shrunk for two quarters in a row, the definition of a recession, but the total contraction over those six months dropped from 0.5 percent to 0.4 percent.

The ONS said the shrank by 0.1 percent in the third quarter and 0.3 percent in the fourth.

This is because of a small revision to the fourth quarter where the rate of contraction fell from 0.31 percent to 0.34 percent.

Combined with the third quarter, unrevised when measured to two decimal places, that left a slightly lower headline figure, the ONS said.

Commenting on the ONS gross domestic product () quarterly national accounts, Liz McKeown, director of economics statistics at ONS, said: “Our updated set of GDP figures shows quarterly growth unrevised across 2023, with a little growth in the first quarter and small contractions in the latter half of the year.”

She noted: “New figures on households show that savings remained high, with an increase in income in the last quarter of the year.”

On today’s Balance of Payments figures, Ms McKeown commented: “Our underlying balance of payments deficit with the rest of the world widened at the end of 2023, partly because the trade picture worsened slightly.”

The underlying current account deficit expanded to £26.3billion (3.9 percent of GDP) in Quarter 4 of 2023.

Responding to the figures, Chancellor Jeremy Hunt said: “Last year was tough as interest rates had to rise to bring down inflation, but we can see our plan is working.

“Inflation has fallen decisively from over 11 percent to 3.4 percent, the economy grew in January and real wages have increased for eight months in a row.

“Our cuts to National Insurance will boost growth by rewarding work and putting over £900 a year back into the average earner’s pocket.”

Figures published by the Office for National Statistics confirming the UK economy did go into recession last year show the Government has “no plan for growth”, the Liberal Democrats said.

The party’s Treasury spokesperson Sarah Olney said: “These damning figures confirm the damage done to the UK economy by Rishi’s recession. This Conservative Government has no plan for growth or to help families paying the price for years of economic chaos through soaring mortgages and rents.”

Labour’s shadow chancellor said: “Rishi Sunak has broken his promise to grow the economy and left Britain in recession with working people paying the price.”

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