The British economy endured a shallow recession last year, as confirmed by data released by the Office for National Statistics. This presents a challenge for Prime Minister Rishi Sunak as he tries to reassure voters about the security and stability of the economy ahead of an expected election later in the year. In the third quarter, GDP decreased by 0.1%, while it dropped by 0.3% in the fourth quarter of last year.
Despite these figures being disappointing for Sunak, there are signs that the economy has started 2024 on a stronger footing. GDP grew by 0.2% in January and continued growth in February and March. However, Britain’s economy still has a long way to go to recover from the impact of the COVID-19 pandemic, which weakened its performance with just 0.1% growth in 2023, its weakest performance since 2009 during the global financial crisis, excluding a big fall in GDP caused by the pandemic in 2020.
The Bank of England has hinted at the possibility of interest rate cuts as inflation approaches the point where such a move would be necessary, but overall Britain’s economy is expected to grow by just 0.25% this year according to BoE’s predictions while official budget forecasters predict an expansion of 0.8%. Despite these challenges, there are some positive signs such as growth in real household disposable income and increased savings as the savings ratio rose slightly in the last quarter of last year. Following this release of data, however,