All eyes at the Treasury this week will be on estimates of economic growth in the final three months of 2023. A contraction in gross domestic product (GDP) in the fourth quarter would spell embarrassment for the government and disaster for Rishi Sunak.
The second of the prime minister’s five pledges was to have the economy growing by the end of the year. Instead, it is widely expected that the Office for National Statistics (ONS) assessment of fourth-quarter activity will show that the economy contracted by 0.1%, after also shrinking by 0.1% in the third quarter (revised from an estimate of no growth). That would mean the UK was in a recession during the second half of 2023, albeit a shallow one. An economy is considered to be in recession after two consecutive quarters of contraction.
