The Office for National Statistics has released official figures confirming that Britain’s economy experienced a shallow recession last year. Prime Minister Rishi Sunak is facing challenges in reassuring voters about the safety and stability of the economy ahead of an expected election later this year. GDP contracted by 0.1% in the third quarter and 0.3% in the fourth quarter of 2023, which may disappoint some voters, especially those who criticize Sunak for overseeing what they call “Rishi’s recession.”
While there are indications that the economy started 2024 on a stronger footing, with GDP growing by 0.2% in January and continued growth in February and March, it is still a long way from fully recovering from the impact of COVID-19. The Bank of England has hinted at the possibility of cutting interest rates as inflation approaches a point that would allow such a move. However, despite these challenges, there are some positive signs to be found: growth in households’ real disposable income and increased savings as the savings ratio rose slightly in the final quarter of last year. Overall, Britain’s economy only grew by 0.1% in 2023, marking its weakest performance since 2009 during the global financial crisis, excluding the major setback caused by COVID-19 in 2020.