The economy is more ‘resilient than many feared’, insists Hunt as UK narrowly avoids recession

The economic system narrowly prevented recession within the second half of final yr, in line with newly printed Workplace for Nationwide Statistics (ONS) figures. That is regardless of development sharply lowering in December. 

The ONS experiences that output between October and December was flat at 0 per cent.

Had the determine been damaging, the UK would have met the technical definition of a recession as a result of the economic system would have contracted over two consecutive quarters. GDP was beforehand reported to have fallen by 0.3 per cent between July and September.

Among the many elements which helped the UK dodge rescission was a surge from journey brokers, which elevated by 14.8 per cent within the final three months of the yr, following a fall within the earlier quarter. There was additionally modest development within the development business of 0.3 per cent.


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Jeremy Hunt stated in response to the ONS figures: “The very fact the UK was the quickest rising economic system within the G7 final yr, in addition to avoiding a recession, reveals our economic system is extra resilient than many feared.

“Nevertheless, we aren’t out the woods but, notably in the case of inflation.

“If we stick with our plan to halve inflation this yr, we may be assured of getting amongst the perfect prospects for development of anyplace in Europe”.

Output in December fell by 0.5 per cent in comparison with the earlier month, the has ONS stated, with contributions to the decline additionally coming from some early winter snow disruption and strikes together with the Royal Mail dispute. The report additionally pointed to a damaging influence of the World Cup, due to the dearth of premier league soccer, as one other rationalization for decreased output.

ONS director of financial statistics, Darren Morgan, stated of the efficiency: “The economic system contracted sharply in December that means, general, there was no development within the economic system during the last three months of 2022.

“In December public providers have been hit by fewer operations and GP visits, partly as a result of influence of strikes, in addition to notably decrease college attendance.

“In the meantime, the break in Premier League soccer for the World Cup and postal strikes additionally precipitated a slowdown.

“Nevertheless, these falls have been partially offset by a powerful month for legal professionals, development in automobile gross sales and the chilly snap growing power technology. Throughout 2022 as an entire, the economic system grew 4%”.

“Regardless of latest squeezes in family incomes, eating places, bars and journey brokers had a powerful yr. In the meantime, well being and schooling additionally started to get well from the results of the pandemic”.

Economists have steered {that a} recession within the first a part of this yr is inevitable, with the Worldwide Monterey Fund (IMF) predicting final month that the UK can be the worst performer within the developed world, and the one to expertise damaging development, together with sanctions-hit Russia.

The Financial institution of England even predicted in November final yr that the economic system was already probably in recession.

Shadow chancellor Rachel Reeves has stated the brand new figures are proof that the UK economic system is caught within the “gradual lane”. She known as for “pressing measures” to be introduced ahead to alleviate the cost-of-living disaster after Workplace for Nationwide Statistics knowledge confirmed the UK recorded zero development between October and December

She stated: “As we speak’s figures present us how – regardless of Britain’s nice potential – our economic system is caught within the gradual lane.

“We could be a chief within the industries of the longer term that may assist develop our economic system.

“And we should usher in pressing measures to forestall but extra hurt from the price of dwelling disaster, utilizing a correct windfall tax on oil and fuel giants to cease the power worth cap going up in April so that individuals have extra money of their pockets.

“Constructed on the rock of financial stability, Labour will deal with the price of dwelling disaster and get our economic system rising, with our Inexperienced Prosperity Plan, reform to enterprise charges, and by making the UK the perfect place to begin and develop a enterprise”.

Jonathan Moyes, head of funding analysis at Wealth Membership, stated the ONS knowledge “paints a really subdued image for the state of the economic system in This autumn”. He stated:

“The discharge will do little to sway the opinions of financial forecasters. It stays a courageous name to sign a turning level in sentiment for the UK. Nevertheless, there does seem like a extra optimistic consensus forming.

“The Financial institution of England upgraded its outlook for the economic system final week, power costs are falling sharply, China is reopening, and rate of interest expectations have eased considerably”.