Learned City economists had been saying the chances of Britain falling into recession were on a “knife-edge.”
As things turned out they were nothing of the sort. A 0.3 per cent fall in GDP in the last quarter of the year is a proper old-fashioned slump.
The grinding months of the cost-of-living squeeze and rocketing mortgage rates caught up with grumpy consumers who chose to do all their Christmas shopping during the Black Friday discount bonanza, then gave the high street a swerve in December.
The numbers are bad but we should at least be relieved on one score. Recessions in the 20th century were associated with devastating periods of scarring mass unemployment. This time we have been spared that misery with joblessness still at historic lows.
But many of those in work have seen their living standards degraded by years of the cost of living running far ahead of pay increases. They feel the going is tough. Indeed GDP per head — perhaps a more accurate measure of people’s personal economic experience — fell in all four quarters last year.
But this is as much a political recession just as much as an economic one. Rishi Sunak was unwise to promise delivering a return to growth last year as one of his five pledges to the British electorate.
Technically he has fulfilled his vow with GDP inching forward a meagre 0.1 per cent over 2023 as a whole, the slowest annual growth since 2009, outside the Covid era.
The proof of just how little gratitude voters feel for that tiny level of growth is likely to be seen late tonight when the numbers come in for the Wellingborough and Kingswood by-elections.
The outlook is slightly rosier for 2024, but is it enough to move the political dial? Probably not.
Growth will be achingly slow yet again and hundreds of thousands more home owners will endure the pain of switching to more expensive home loans. Until voters are persuaded their personal circumstances are sustainably improving, the Government will struggle to reverse the recession in its poll ratings.
