According to the report released today by Uk’s Office For National Statistics (ONS) the United Kingdom has fallen into an economic recession with a 0.3 decline in Gross Domestic Product (GDP) between October and December of 2023.
This is the first time- excluding the 2020 global pandemic- the country is facing such technical recession since 2009 when the country alongside various countries in the world were facing economic recession.
This raises the question of whether the pledge made by the current prime minister of Uk, Rishi Sunak, a sham as economic growth, was part of the 5 promises he made in January 2023.
Responding to this news the Labour Party’s shadow chancellor, Rachel Reeves said “Rishi Sunak’s promise to grow the economy is now in tatters.
“The prime minister can no longer credibly claim that his plan is working or that he has turned the corner on more than fourteen years of economic decline under the Conservatives that has left Britain worse off. This is Rishi Sunak’s recession and the news will be deeply worrying for families and business across Britain.”
“It is time for a change. We need an election now to give the British people the chance to vote for a changed Labour Party that has a long-term plan for more jobs, more investment and cheaper bills. Only Labour has a plan to get Britain’s future back.”
However, this being revealed just a few weeks before the country’s next general election has been described as more of a political move than an economic one according to Ruth Gregory deputy chief UK economist at Capital Economics. He said, ” this recession is as mild as they come”, he also added that the data “is more politically significant than it is economically”.
Nevertheless, Lord Rose chairman of Asda has countered this argument stating that “It looks like a duck, it quacks like a duck, it walks like a duck, it is a duck – it is a recession.
“It doesn’t matter if it is a technical recession or not. There is no surprise here and I take no pleasure in saying there is no surprise that we’re in it. We’ve got a low growth economy or a no growth economy.”
Also speaking on how the recent report is not as bad as it made to be Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said “It’s overly dramatic to label the decline in economic activity in the second half of 2023 a recession, given that employment continued to rise, real wages rebounded and measures of business and consumer confidence returned to levels consistent with rising activity by the end of the year,”
Also, there has been various evidence of various households cutting back on their expenses as a result of high cost of living as well as high interest rates. Consumers facing services have also dropped by 0.7% between October and December 2023 as a result of people spending less.
The whole of the United Kingdom as well as the entire world awaits the results of the upcoming general election in the country.
