UK narrowly avoided recession as economy flatlined at the end of 2022
The UK’s economy flatlined in the last three months of 2022, helping it to avoid a recession by the thinnest of margins, new data show.
The Office for National Statistics recorded 0.0% growth in gross domestic product (GDP) in the fourth quarter.
Anything below zero would have pushed the economy into recession. A recession is generally defined in the UK as two quarters of declining GDP in a row and the economy contracted 0.2% in the third quarter.
The ONS said that when counting to two decimal places, the UK eked out a tiny 0.01% growth. These figures might be revised in late March when the ONS looks again.
It came as December’s GDP figures showed that the economy shrunk by 0.5%, in part due to strikes and the World Cup, as the Premier League took a break.
“The economy contracted sharply in December meaning, overall, there was no growth in the economy over the last three months of 2022,” said ONS director of economic statistics Darren Morgan.
“In December public services were hit by fewer operations and GP visits, partly due to the impact of strikes, as well as notably lower school attendance.
“Meanwhile, the break in Premier League football for the World Cup and postal strikes also caused a slowdown.”
Lawyers had a good month, and people also spent more on energy as they heated their homes during the cold snap.
Across the year as a whole, the economy grew by 4% as restaurants, bars and travel agents bounced back from the pandemic, the ONS said.
Chancellor Jeremy Hunt said that the UK is “not out the woods yet” and said that the country could have some of the best growth prospects in Europe if it sticks to his plan.
“Our economy is more resilient than many feared,” he said.
“However, we are not out the woods yet, particularly when it comes to inflation.
“If we stick to our plan to halve inflation this year, we can be confident of having amongst the best prospects for growth of anywhere in Europe.”
Cost of living
Labour shadow chancellor Rachel Reeves called for more help for households with the cost of living.
“Today’s figures show us how – despite Britain’s great potential – our economy is stuck in the slow lane,” she said.
“We can be a leader in the industries of the future that will help grow our economy.”
“And we must bring in urgent measures to prevent yet more harm from the cost-of-living crisis, using a proper windfall tax on oil and gas giants to stop the energy price cap going up in April so that people have more money in their pockets.”
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