UK economy falls into recession in the second half of 2023

Great Britain’s gross domestic product contracted more than expected by 0.3% in the fourth quarter compared to 0.1% contraction during July-September period and consensus for 0.1% drop.

The fourth quarter fall in GDP was the biggest since the first quarter of 2021, adding to signals that UK’s economy fell into a recession in the second half of 2023, after being in stagnation during past almost two years.

The biggest contributors to the decrease in gross domestic product were manufacturing, construction and wholesale sectors.

The latest data conflict with the Bank of England’s expectations that the economic growth will slightly pick up in 2024 and send strong warning to the government and PM Sunak, who promised to boost growth ahead of election, due later this year.

British government faces a tough work to try to set a pathway for economy to grow, with slightly optimistic comments from finance minister about signs that the economy is turning a corner, and that the government needs to stick to the plan on cutting taxes on work and businesses to achieve the target.