UK narrowly avoids recession amid strikes
- The British economy stagnated in the final three months of 2022, figures show
- UK’s finance minister warns ‘not out of the woods yet’ over surging inflation
The UK avoided a recession last year by the narrowest of margins after the cost-of-living crisis and industrial action hit the economy during December.
Gross domestic product was unchanged in fourth quarter following a revised 0.2 per cent decline in the previous three months, the Office for National Statistics said Friday. Output in December alone fell 0.5 per cent.
The figures meant that in the second half of last year Britain dodged back-to-back quarterly contractions – the definition of a technical recession.
The economy nonetheless was 0.8 per cent smaller than its size at the end of 2019, making the UK the only Group of Seven country that has yet to fully recover output lost during the pandemic.
“The UK economy ended 2022 on a slightly more positive note, narrowly avoiding a technical recession, but it is still expected to fall into a mild yet prolonged recession throughout this year,” said Yael Selfin, chief economist at KPMG UK. The December figures are “pointing to the continued fragility of the UK economy.”
GDP figures are subject to revisions, leaving open the risk that Britain was in fact in recession. The ONS will make another estimate at the end of March.
Chancellor of the Exchequer Jeremy Hunt welcomed the figures but noted the government needs to bear down on inflation, which reached a 41-year high last year.