UK economy shows zero growth, narrowly avoiding recession

BRITAIN’s economy showed zero growth in the final three months of 2022, figures from the Office for National Statistics (ONS) showed on Friday (Feb 10), meaning that it narrowly avoided entering a recession.

Economists polled by Reuters had forecast zero growth for Q4 2022.

Monthly gross domestic product data for December – a month marked by widespread rail strikes and bad weather – showed a 0.5 per cent contraction, larger than the 0.3 per cent forecast.

“The economy contracted sharply in December, meaning that, overall, there was no growth in the economy over the last three months of 2022,” said ONS statistician Darren Morgan.

The Bank of England (BOE) forecast last week that Britain would enter a shallow but lengthy recession, starting in the first quarter of this year and lasting five quarters.

British living standards have been hammered by a surge in inflation, which hit a 41-year high of 11.1 per cent in October, and firms and households will also feel an increasing impact from the BOE’s rapid increase in interest rates since December 2021.

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The UK’s finance minister Jeremy Hunt said the data showed that the British economy was more resilient than expected, but still not clear of danger.

“We are not out the woods yet, particularly when it comes to inflation,” he said.

“If we stick to our plan to halve inflation this year, we can be confident of having among the best prospects for growth of anywhere in Europe.” REUTERS