UK Narrowly Avoids Recession as GDP Stands at 0% Growth in Q4 2022
The UK narrowly avoided a technical recession in the last quarter of 2022, according to figures released by the Office for National Statistics (ONS). The economy showed no growth between October and December, after falling 0.3% in the July-September period.
Jeremy Hunt, the Chancellor, remarked that this was an indication that “our economy is more resilient than many feared” – yet he cautioned that we are “out of the woods yet”. A recession is generally characterized as a period of economic contraction lasting for two consecutive quarters. When this happens, businesses typically don't do as well financially and may have to reduce staff, resulting in decreased tax income for the government.
Last week, it was predicted by the Bank of England that the UK economy would experience a slight recession for five quarters, starting from the first quarter of 2023. The International Monetary Fund (IMF), a body aiming to ensure economic growth stability, has predicted that the UK will experience a recession in 2020, with its performance being worse than that of any other developed country, even Russia.
The International Monetary Fund (IMF) predicted in January that the UK economy will be the only advanced economy to experience a decrease in 2023, with a 0.6 percent contraction.
GDP declined by 0.2% in the July-September quarter, and if there were two straight quarters of contraction, the nation would have been in a recession. On Friday, the Office for National Statistics (ONS) reported that Gross Domestic Product (GDP) for the October-December period was flat.
According to the ONS, the UK GDP for the whole of 2022 is estimated to have risen by 4.0% after a 7.6% jump in 2021. However, the UK is still the only G7 country where the economy is smaller than pre-pandemic levels.
According to the report, middle-income households could experience a decrease of up to 13% in their disposable income for this financial year, amounting to as much as £4,000.
The Office for National Statistics reported that the monthly Gross Domestic Product is likely to have decreased by 0.5 percent in December 2022, after having remained unchanged at 0.1 percent in November. Services sector declined by 0.8 percent, whereas production output increased by 0.3 percent. There was no growth in the construction sector.
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