The British economy continued to contract in the last quarter of 2023, entering a state of recession and increasing the challenges facing the British Prime Minister. Rishi Sunak Which promised to boost growth before elections expected in 2024.
Below expectations
According to data from the British Office of National Statistics, the gross domestic product contracted by 0.3% in the last quarter of 2023 after a contraction of 0.1% in the previous quarter.
It is noteworthy that a stagnant economy (negative growth) for two consecutive quarters means a recession.
Economists polled by Reuters expected that Britain’s economy would contract by 0.1% in the fourth quarter of last year.
According to the British Bureau of Statistics, the decline in British GDP in the last quarter of last year was the largest since 2021.
The British economy has been suffering from recession for nearly two years, but the Bank of England expected it to recover slightly in 2024.
Alarm bells
Reuters quoted Alex Fitch, Director of Policy and Insights at the British Chambers of Commerce, as saying, “Businesses were already under no illusion about the difficulties they are facing, and this news will undoubtedly ring alarm bells for the government.”
He added: “The Finance Minister must use his budget in just under 3 weeks to set a clear path for businesses and the economy to grow.”
British Finance Minister Jeremy Hunt said that there are signs that the British economy is at a turning point, and the plan must be adhered to by reducing taxes on work and companies to build a stronger economy.
Media reports stated that Hunt seeks to cut billions of pounds sterling from public spending plans to finance tax cuts – before the elections – in his budget scheduled for next March 6, if it is drafted in light of the scarcity of financial resources.
The British Office of Statistics said that the British gross domestic product fell by 0.1% on a monthly basis in December, after growth of 0.2% last November.
Experts’ expectations indicated that the economy might contract by 0.2% on a monthly basis last December.
The statistics office said the manufacturing, construction and wholesale sectors were the biggest contributors to the decline in GDP.
