Official figures released on Thursday confirmed that Britain’s economy had entered a recession in the second half of last year. The Office for National Statistics reported that Gross Domestic Product (GDP) had contracted by 0.1% in the third quarter and by 0.3% in the fourth quarter, remaining unchanged from the initial estimates.
Although the economy showed some signs of improvement at the start of 2024, with GDP growing by 0.2% in January and unofficial surveys indicating continued growth in February and March, the country has been slow to recover from the impacts of the COVID-19 pandemic. As a result, the economy is currently only 1% larger than it was in late 2019, with only Germany within the Group of Seven nations experiencing a worse economic performance.
The Bank of England has stated that British inflation is approaching a level where interest rate cuts can be implemented. The central bank predicts that the economy will only grow by 0.25% this year, while official budget forecasters anticipate a 0.8% expansion in the economy.
Following the release of the data, the value of the British pound remained relatively stable against both the U.S. dollar and the euro.