Economy: Great Britain: Economy is slipping into recession

The British economy slipped into recession at the end of last year. In the fourth quarter, gross domestic product (GDP) fell by 0.3 percent compared to the previous quarter, as the ONS statistics office in London announced. Analysts were surprised by the strength of the damper. They had only expected an average decline in economic output of 0.1 percent for the months October to December.

Europe’s second-largest economy had already shrunk by 0.1 percent in the third quarter. When economic output falls in two consecutive quarters, economists speak of a technical recession.

Setback for Sunak

The development is seen as a setback for Prime Minister Rishi Sunak in an election year. He had promised to stimulate the economy. Finance Minister Jeremy Hunt pointedly emphasized that the figures were no surprise. But the country is on the right track, the government will stick to its plan and continue to cut taxes and fight inflation. The opposition Labor Party, on the other hand, criticized that the recession was the result of 14 years of chaotic conservative politics. Great Britain is electing a new parliament this year. Labor is well ahead of the Tories in all polls.

As the statistics office also announced, economic performance developed weaker in December than in the previous month. A decline of 0.1 percent was reported for December. In addition, GDP developed somewhat weaker in November than previously known. The increase was revised downwards to just 0.2 percent, after previously reporting an increase of 0.3 percent. Unlike other countries such as Germany, Great Britain also publishes monthly data on economic performance.

However, the country’s industrial production was surprisingly strong. Manufacturing rose by 0.6 percent month-on-month in December, the statistics office said. Analysts had expected a slight decline. Additionally, output growth was revised upwards in November.