London - Official figures reveal that Britain's economy slipped into a recession in the latter half of 2023, registering a worse-than-anticipated 0.3% contraction in the final quarter of the year, following a 0.1% decline between July and September. The unexpected downturn, unveiled in data released on Wednesday, underscores the challenging economic landscape facing the nation.
Earlier projections by economists, as indicated in a Reuters poll, had anticipated a milder 0.1% dip in Gross Domestic Product (GDP) during the October-to-December period. However, the reality proved bleaker than anticipated.
The Bank of England remains cautiously optimistic, expressing expectations for a rebound in economic activity throughout 2024. Nevertheless, sluggish growth forecasts for the current year pose a significant challenge for Prime Minister Rishi Sunak, especially as he seeks to garner voter support ahead of the anticipated national election later in 2024.
According to the Office for National Statistics (ONS), economic output experienced a 0.1% decline on a monthly basis in December, following a modest 0.2% expansion in November. Again, these figures deviated from the expectations outlined in the Reuters poll, which had predicted a 0.2% decrease in December.
The release of the GDP data prompted a moderate weakening of the sterling against both the dollar and the euro, indicating investor concerns over the economic outlook.
With a 0.3% contraction year-on-year from December to December, the UK finds itself navigating the complexities of a recessionary phase that emerged in the latter part of 2023, according to official statistics. The discrepancy between economists' forecasts and the actual economic performance underscores the uncertainties looming over the country's economic trajectory.
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