Britain Officially in Recession
London, 15 February 2024
Preliminary estimates indicated that the British economy shrank by 0.3% quarter in Q4 2023, worse than market expectations of a 0.1% decrease in Q3. This was after a 0.1% decline in Q3.
A broad fall in output, including in services (-0.2%, unchanged from Q3), especially in wholesale and retail trade (-0.6%), industrial production (-1% vs 0.1%), primarily in the manufacture of machinery and equipment (-7%) and construction (-1.3% vs 0.1%), was the reason for the economy's entry into recession. Exports (-2.9% vs. -0.8%), imports (-0.8% vs. -1.8%), household spending (-0.1% vs. -0.9%), with a decrease in spending on transportation, miscellaneous goods and services, and recreation and culture, and government consumption (-0.3% vs. 1.1%), with a decrease in activity in education and health, were the areas where expenditures fell.
An increase in gross capital creation (1.4% vs. -1.4%), primarily from other buildings and structures, somewhat countered those declines. When 2023 is taken into account, the UK GDP increased by 0.1%.
Forecast
In comparison to the previous quarter, the United Kingdom's Gross Domestic Product (GDP) shrank by 0.30 percent in the fourth quarter of 2023. By the conclusion of this quarter, the GDP Growth Rate in the United Kingdom is anticipated by Trading Economics global macro models and analysts to be 0.20 percent. Their econometric models predict that the GDP Growth Rate of the United Kingdom will generally trend around 0.50 percent in 2025.
Source: Trading Economics