UK falls into technical recession - ONS

(Sharecast News) - The UK fell into recession at the end of 2023, official data showed on Thursday, after a bigger-than-expected contraction in GDP in the fourth quarter.

According to provisional estimates from the Office for National Statistics, GDP contracted by 0.3% in the three months, following a 0.1% decline in the third.

A recession is defined as two consecutive quarters of negative growth.

Analysts had been expecting another quarter of no growth, although most had been looking for a smaller contraction, of 0.1%.

Over the entirety of 2023, however, the ONS said GDP edged up by 0.1% year-on-year.

During the fourth quarter, there were falls in all three main sectors. Construction output slid 1.3%, production by 1% and services by 0.2%.

On a monthly basis, GDP fell by 0.1% in December, compared to growth of 0.2% in November - revised down from an 0.3% improvement - and a 0.5% fall in October, which was revised down from a 0.3% fall.

Thursday's GDP data will be a blow to the government, which just over a year ago promised to grow the economy as one of Rishi Sunak's five pledges.

At the time, Downing Street said the pledge would be met if the economy was bigger the in fourth quarter of 2023 than it was in the third.