UK Economy Shrinks 0.3% As Estimated

The UK economy contracted in the fourth quarter, as initially estimated, final data from the Office for National Statistics showed on Thursday.

Gross domestic product fell by unrevised 0.3 percent after a 0.1 percent drop in the third quarter.

The statistical office thus confirmed a technical recession towards the end of 2023. Consequently, the economy grew only 0.1 percent in 2023, much weaker than the 4.3 percent expansion seen in 2022.

Excluding the year 2020, which was affected by the coronavirus pandemic, this was the weakest annual change in real GDP since the financial crisis in 2009, the ONS said.

Compared with the same quarter a year ago, real GDP declined 0.2 percent in the fourth quarter.

Data showed that there was a fall in the volume of net trade, gross capital formation, and household consumption in the fourth quarter, partially offset by an increase in government consumption.

Household spending fell 0.1 percent sequentially, while government spending grew 0.1 percent.

Gross fixed capital formation advanced by revised 0.9 percent. Within this, business investment moved up 1.4 percent.

The trade deficit for goods and services was 1.1 percent of GDP in the fourth quarter, revised up from the first estimate deficit of 1.6 percent.

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