Britain's economy has entered a recession, with gross domestic product (GDP) contracting by 0.3 percent in the fourth quarter of 2023. This decline follows a 0.1 percent contraction in the previous quarter, marking the largest quarterly drop since early 2021.
The economic downturn poses a significant challenge for Prime Minister Rishi Sunak, who has pledged to stimulate growth ahead of the anticipated 2024 election. The Bank of England has projected a modest recovery in 2024, but the current recession casts doubt on the feasibility of this forecast.
Business leaders have expressed concern about the economic outlook, urging the government to take action to support growth. Finance Minister Jeremy Hunt has indicated that he will announce tax cuts in the upcoming budget, but media reports suggest that these cuts may be funded by reductions in public spending.
The ONS data also revealed a 0.1 percent decline in economic output in December, following a 0.2 percent increase in November. The manufacturing, construction, and wholesale sectors were identified as the primary contributors to the overall GDP decrease.