Closing post
Time for a recap…
The UK economy fell into recession at the end of last year as hard-pressed households cut back on spending amid the cost of living crisis, in a heavy blow to Rishi Sunak’s promise to kickstart growth.
The Office for National Statistics said gross domestic product (GDP) fell by a larger than expected 0.3% in the three months to December after a decline in all main sectors of the economy and collapse in retail sales in the run-up to Christmas.
It followed a drop of 0.1% in the third quarter, confirming a second consecutive quarter of falling national output – the technical definition of a recession.
Official confirmation of a recession will embarrass the prime minister before a general election expected this year, having made growing the economy one of his five flagship priorities for government.
Rachel Reeves, the shadow chancellor, said Sunak’s promise was “in tatters” after years of economic stagnation under the Conservatives.
She said:
“This is Rishi Sunak’s recession, and the news will be deeply worrying for families and business across Britain.”
The ONS said growth over the course of 2023 as a whole was estimated at 0.1%, the weakest year since 2009 during the financial crisis, excluding the economic collapse in 2020 during the Covid pandemic.
More here:
Here’s the rest of today’s business news:
The economic storm clouds over Germany are darkening.
Germany’s DIHK chambers of industry and commerce warned on Thursday that Europe’s biggest economy will shrink by 0.5% this year, in a second year of recession.
This will mean Germany’s worst downturn in two decades, and only the second time in Germany’s post-war history where the economy contracted for two years in a row, Reuters reports.
A DIHK poll of more than 27,000 companies showed that of those surveyed, 35% expect business to deteriorate in the next 12 months with only 14% expecting an improvement, as high energy prices, bureaucracy, a skilled workers shortage and weak domestic demand weigh on economic output.
DIHK says:
“The bad mood among companies is becoming more entrenched.”
