The statistics released by the Office for National Statistics (ONS) on Thursday indicate that the UK economy underwent a recession in the fourth quarter. The country's gross domestic product (GDP) observed a sequential decrease of 0.3 percent after a steady yet unchanged dip of 0.1 percent in the third quarter, despite the forecast predicting an additional 0.1 percent decrease for the fourth quarter.
Troublingly, all three major sectors experienced declines in the fourth quarter. Services witnessed a contraction of 0.2 percent whereas production went down by 1.0 percent. Construction output also took a hit with a 1.3 percent decrease.
From a spending perspective, drops in the volume of net trade, household spending, and government consumption were noted. However, the downward trend was slightly mitigated by a rise in gross capital formation, as detailed by the ONS.
A year-on-year comparison reveals the real GDP dropped by 0.2 percent in the fourth quarter, contradicting the predictions of a 0.1 percent increase.
GDP growth in 2023 markedly decelerated to 0.1 percent from 4.3 percent in 2022, registering the weakest growth since the 2009 financial crisis, barring the year 2020.
Finally, in December, the GDP contracted by 0.1 percent, a stark contrast to the 0.2 percent growth witnessed in November.
