UK economy fell into recession in second half of 2023

Workers cross London Bridge during the morning rush hour in London, Britain, March 10, 2023. REUTERS/Toby Melville/File photo

LONDON  – Britain’s economy entered a recession in the second half of 2023 after it shrank by a worse-than-expected 0.3 percent in the three months to December having also contracted by 0.1 percent between July and September, official data showed on Wednesday.

A Reuters poll of economists had pointed to a smaller 0.1 percent fall of gross domestic product (GDP) in the October-to-December period.

The Bank of England has said it expects the economy to pick up in 2024.

READ: UK recession might be under way after economy shrinks in Q3

However, slow growth this year would still represent a difficult backdrop for Prime Minister Rishi Sunak’s attempts to woo voters ahead of a national election expected later in 2024.

The Office for National Statistics (ONS) said economic output fell by 0.1 percent in monthly terms in December after 0.2 percent growth in November. The Reuters poll had pointed to a 0.2-percent fall in December.

Sterling weakened moderately against the dollar and the euro shortly after the GDP data release.