UK GDP is estimated to have fallen by an unrevised 0.3% between October and December 2023.
GDP measures the value of goods and services produced in the UK. It estimates the size of – and growth in – the economy.
In output terms, in Q4 2023, there were falls in all three main sectors, with declines of 0.1% in services, 1.1% in production, and 0.9% in construction output.
These figures also follow the unrevised fall of 0.1% in the previous quarter of 2023.
The latest unrevised figures from the Office for National Statistics (ONS) therefore confirm the UK did enter a recession – where GDP falls for two successive quarters.
However, the ONS noted that GDP for the whole of 2023 is estimated to have increased by an unrevised 0.1% compared with 2022. And, earlier this month, GDP was estimated to have grown 0.2% in the month to January 2024.
‘Recovery already underway’
According to Ashley Webb, UK economist at Capital Economics, the final GDP release “doesn’t change much” as it confirms the economy “was in the mildest of mild technical recessions at the end of last year”.
But Webb added: “Timely indicators suggest the economy probably exited recession in Q1 and the economic recovery is already underway.”
Meanwhile, its forecast for inflation to fall further than the consensus, and for interest rates to be cut faster and further than current market pricing, “suggests the economic recovery in 2024 and 2025 will be stronger than most expect”, Webb added.
Jeremy Hunt, Chancellor of the Exchequer, said: “Last year was tough as interest rates had to rise to bring down inflation, but we can see our plan is working. Inflation has fallen decisively from over 11% to 3.4%, the economy grew in January and real wages have increased for eight months in a row.
“Our cuts to National Insurance will boost growth by rewarding work and putting over £900 per year back into the average earner’s pocket.”
