UK emerges from recession

The UK is set fair to emerge from recession as the economy returned to growth with a 0.2 per cent increase in January.

Britain’s gross domestic product (GDP) fell 0.3 per cent between October and December 2023, preceded by a 0.1 per cent dip during 2023’s third quarter, figures that put the country into recession.

Retail spending increased by 3.4 per cent in January and construction rose by 1.1 per cent, although production, which included manufacturing, shrank by 0.2 per cent, the Office for National Statistics (ONS) revealed.

January’s growth will not have surprised Bank of England Governor Andrew Bailey, who stated in February that the downturn would be one of the “shallowest and shortest in 70 years.”

The January figures came as a boost for Britain’s PM Rishi Sunak, who has pledged to grow the economy, and Chancellor Jeremy Hunt who announced when introducing the Budget on March 6 that the UK “had turned the corner.”

Referring to the January GDP figures on March 13, Hunt admitted that recent years “had been tough,”

Suren Thiru, economics director at the Institute of Chartered Accountants of England and Wales (ICAEW), nevertheless warned that the monthly figures could decline again in February when heavy rainfall deterred shoppers.

Quoted in the Telegraph, James Smith from the Resolution Foundation, pointed out that notwithstanding the 0.2 per cent rise, growth remained sluggish.

“Britain is far from ending its period of prolonged stagnation, with the economy yet to return to its pre-pandemic size on a per-person basis,” he said.