Economy

UK economy fell into recession in second half of 2023

UK is in stagnation rather than a full-blown downturn but it could ramp up pressure on the Bank of England to cut interest rates

The pound has slipped against the dollar and the figures are likely to be used by the British opposition parties to attack the ruling Conservative government’s handling of the economy. Picture: Getty

The UK economy fell into recession in the second half of last year.

Gross domestic product fell 0.3 per cent in the fourth quarter, more than the 0.1 per cent drop economists forecast, Office for National Statistics figures Thursday show.

It followed an unrevised 0.1 per cent decline in the previous three months.

Economists define a technical recession as two straight quarters of falling output but the small scale of the declines suggest the UK is in stagnation rather than a full-blown downturn. It could nonetheless increase pressure on the Bank of England to cut interest rates from a 16-year high.